Australia's biggest and busiest airport could soon be changing hands, under a $23.6 billion takeover bid announced to the Australian Securities Exchange (ASX) this morning.
Key points:The international consortium which made the bid is called Sydney Aviation Alliance The Sydney Airport board recommended shareholders vote to accept the offerThe bid comes after two earlier proposals were rejected for $8.25 and $8.45 per share
In a statement, Sydney Airport Limited revealed it had entered into an arrangement with an international consortium, which would acquire 100 per cent of the publicly-listed company.
The consortium, named Sydney Aviation Alliance, is comprised of several Australian and international investment and infrastructure funds.
Under the plan, Sydney Airport shareholders would receive $8.75 per share.
The company this morning opened up almost 3 per cent on the ASX, at $8.46, on the back of the announcement.
The airport's board unanimously recommended that shareholders vote in favour of accepting the offer at meetings likely to be held early next year.
It came after two earlier proposals had been rejected for $8.25 and $8.45 per share, respectively.
Among the members of the consortium seeking to take over Sydney Airport include IFM's Australian Infrastructure Fund and Global Infrastructure Fund as well as AustralianSuper, QSuper and Global Infrastructure Partners.
However, the bid will require regulatory approval.The consortium has been undertaking due diligence on the airport since mid-September, scouring the books and seeking approval from investors.
A Sydney Airport Alliance spokesperson said the finalisation of the deed was a "significant step forward" and the consortium looked forward to security holders voting on the proposed deal.
"Our alliance represents many millions of Australians … we intended to work hard to bring more flights and passengers back to the airport as the aviation industry emerges from COVID-19," they said.
Share prices have fluctuated over the course of the pandemic, hitting $5.50 in February this year.
While Sydney's air patronage had been ravaged during the pandemic, NSW's international border opened last week, and there are plans to reopen all domestic borders, with the exception of WA, before the end of the year.
"Today's announcement is the culmination of months of engagement between all parties," Sydney Airport chairman David Gonski said.
"The Sydney Airport Boards believe the outcome reflects appropriate long-term value for the airport, and unanimously recommend the proposal to security holders, subject to customary conditions such as independent expert approval and no superior proposal."
NSW will also have a second international airport, at Badgerys Creek, which is due to open in 2026.
In 2017 Sydney Airport declined to build the new facility, which is about 50 kilometres west of the CBD, citing "risks" on monetary returns for their investors as its main reason behind its decision.