Super giants bid $22b for Sydney Airport

Sydney Airport has received a non-binding takeover offer from a cohort of industry superannuation fund investors looking to capitalise on the pandemic-induced weakness in the aviation sector.

ASX-listed Sydney Airport said a consortium comprising the industry super sector’s asset manager, IFM Investors, QSuper and North American pension funds Global Infrastructure Management have lobbed a bid that values the company at more than $22 billion.

At a price of $8.25 a share the offer is at a 42 per cent premium to Sydney Airport’s closing price on Friday of $5.81.

Sydney Airport is the target of a takeover bid from super funds.Credit:James Brickwood

Sydney Airport’s board said it would assess the proposal, but also pointed out that it valued the airport at less than its pre-COVID valuation, and stressed the damage caused by the pandemic would be short-term.

“The Sydney Airport Boards note that Sydney Airport is a world class airport and one of Australia’s most important infrastructure assets. Sydney Airport is Australia’s largest airport and is the gateway to international travel in and out of Australia,” it said.

“The indicative proposal has been made during a global pandemic which has deeply affected the aviation industry and the Sydney Airport security price. The indicative price is below where Sydney Airport’s security price traded before the pandemic,” it said.

In early trading, Sydney Airport shares surged 32 per cent to $7.58.

IFM Investors manages more than $150 billion in assets, and is owned by superannuation giants including Australian Super, Cbus, HESTA and Hostplus.

Sydney Airport is already about 15 per cent owned by UniSuper, another major industry super fund. A condition of the bid is that UniSuper reinvest its interest in the airport for an equivalent interest in the consortium’s holding vehicle, rather than receive cash for its stake.

The bid is also subject to other conditions, including the consortium being able to conduct due diligence.

IFM already owns 25 per cent of Melbourne Airport, 20 per cent of Brisbane Airport, 13 per cent of Adelaide Airport, and a stake in Perth Airport, which are all unlisted.

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