Sydney Airport willing to talk sale as investor prods board

Bloomberg

Sydney Airport said it’s prepared to hold discussions with suitors over a takeover offer of more than $16.8 billion as the company’s largest shareholder agitated for negotiations to start.
The airport said it’s “open to engaging” with the bidders, led by IFM Investors, if they make an offer that reflects “long-term value.” At the same time, Sydney Airport rejected a small sweetener from the group that boosted the newest proposal to A$22.8 billion ($16.8 billion).
Sydney Airport’s willingness to talk comes as its biggest shareholder pushes the board to start discussions for a sale. UniSuper Ltd, which would fold its 15% stake into the take-private group, said the latest A$8.45-a-share bid, up from A$8.25, was “the basis for a reasonable negotiation.”
After being hammered by coronavirus restrictions that have decimated airlines and tourism, Sydney Airport is clinging to hopes that vaccination rollouts around the world will allow global travel to resume.
But the outlook has darkened since the airport rejected the suitors’ first approach last month. Much of Australia has been thrust into lockdown as authorities struggle to contain a breakout of the delta variant. That’s delaying any aviation recovery and increasing the financial pressure on Australia’s biggest travel hub.
Unisuper Chief Investment Officer John Pearce said in an interview that A$8.45 a share “is a fair price” and enough to warrant “limited due diligence and
conduct further negotiations.” Pearce said he’d made his views clear to Sydney Airport Chairman David Gonski.
Shares in Sydney Airport swung between gains and losses after the latest rejection. The stock was down 0.4%
at A$7.72 in late afternoon
trading. The Sydney Aviation Alliance, as the bidding consortium calls itself, said it’s still trying to persuade Sydney Airport’s board to support the sweetened offer. However, the group said the airport’s lack of engagement so far and the immediate rejections of its two proposals suggest success is a long shot.
“It appears unlikely that the parties can agree a path forward,” it said in a statement.