The board of Sydney Airport has agreed to a buyout from a consortium led by Melbourne-based IFM Investors for A$23.6bn (US$17.5bn).
The consortium, known as Sydney Aviation Alliance, offered the airport A$8.75 a share. The deal values Sydney Airport’s equity at approximately $23.6 billion and represents an uplift in equity value of approximately $1.3 billion to the price of $8.25 initially offered by the Consortium in July 2021, and a $7.9 billion uplift to Friday’s (Nov. 5) closing price.
The Sydney Airport Boards unanimously recommended that Sydney Airport securityholders vote in favour of the takeover, in the absence of a superior proposal and subject to an independent expert report. The Scheme meetings are expected to be held in the first quarter of 2022.
The deal announced on Friday is the culmination of a long negotiation process. Sydney Airport first received an unsolicited bid by SAA on July 5, 2021 at an indicative price of $8.25 per stapled security, which was rejected. On 16 August 2021, Sydney Airport announced it had received a revised proposal from the Consortium at an indicative price of $8.45 per stapled security, which was also rejected.
On 13 September 2021, Sydney Airport announced that it had received a further revised proposal from the Consortium for $8.75 per stapled security. Following completion of a four-week non-exclusive due diligence period, and negotiations in relation to binding documentation, Sydney Airport has now entered into the SID with SAA.
The Scheme is not subject to any financing condition and SAA has already lodged applications with FIRB and the ACCC in respect of the required regulatory approvals.
The Directors have appointed Kroll Australia Pty as the Independent Expert to opine on whether the Schemes are in the best interests of Sydney Airport Securityholders.
For the Schemes to proceed, the resolutions at the Scheme meetings must be approved by at least 75% of all votes cast by Sydney Airport Securityholders.