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SYDNEY AIRPORT: Board Rejects takeover offer

SYDNEY AIRPORT: Board Rejects takeover offer

As we reported yesterday the board of Sydney Airport met yesterday and rejected the AU$8.25 per share offer from IFM Investors. The offer is about half a dollar over the current share price, and just under a dollar down on the pre-pandemic price – prior to an AU$2 Billion capital raising to shore up its balance sheet. According to the AFR that gives the Airport an adjusted share price of AU$7.76 (pre-pandemic).

The rejection of the AU$22 billion takeover proposal was not a surprise and was positioned on the grounds that it was not in the best interests of shareholders.

‘Sydney Airport is strongly positioned to deliver growth as vaccination rates increase and we move into the post-pandemic recovery period.

It has rapidly adapted to the COVID environment, strengthening its balance sheet, and tightly managing costs to maintain flexibility to respond to a range of recovery scenarios and pursue sensible growth opportunities as the recovery unfolds.AFR

AFR

Even if the Sydney Airport gave approval, the potential new owners might run offside with the regulator, who would be concerned that elements of the same entity owned the three east-coast capital city airports, when they are limited to a maximum of 15% of up to 2.

2PAXfly Takeout

Remembering that you can cancel and rebook any fares through to the end of February 2022, this offer is worth booking some speculative travel.

I usually value status credits over points, but triple points is a good deal. Anyway if a good bonus status credits deal comes up – I can always cancel my triple points booking and rebook using the credit to gain the the status deal. Sorry guys, you can’t combine deals.

Qantas didn’t come down in the last shower, so don’t expect this triple points deal to be giving you the best fare prices (I haven’t checked this), and the same applies to those double status points offers if they return. I have no inside knowledge, but a triple points offer, often comes just before a double status credits offer. Just sayin’.

Not really anything to see here. This rejection was expected. More interesting will be to see what happens next. What offer will make the board consider a takeover?

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