Sydney Airport rejects K58bil buyout plan

SYDNEY: Sydney Airport Holdings Pty Ltd said yesterday that it would reject a A$22.26 billion (K58.32bil) takeover proposal from a group of infrastructure funds, the biggest of a frenzy of Australian deals fuelled by record-low interest rates.
The operator of Australia’s largest airport said directors had unanimously concluded the proposal undervalued the airport and was not in the best interest of shareholders.
If successful, it would have been one of Australia’s biggest buyouts.
Record-low interest rates have prompted pension funds and their investment managers to chase higher yields, leading to recent asset purchases from Telstra Corp and Qube Holdings.
Electricity poles-and-wires company Spark Infrastructure Group also rejected a A$4.91 billion (K12.86bil) buyout proposal from private equity firm KKR & Co Inc and Ontario Teachers’ Pension Plan Board but left open the chance of some engagement.
Last week, the Sydney Aviation Alliance, a consortium of IFM Investors, QSuper and Global Infrastructure Partners offered A$8.25 (K21.62) a share, for a premium of 42 per cent to pandemic-ravaged Sydney Airport’s last trading price before the offer.
Shares of Sydney Airport were flat at A$7.80 (K20.44), a sign the market expected further negotiations.
The proposal is contingent on a board recommendation and access to due diligence. – Reuters