Insights

Could Sydney Airport’s (ASX:SYD) buyout offer be selling investors short?

We take a look into Sydney Airport’s underlying value and past share price movements.
The post Could Sydney Airport’s (ASX:SYD) buyout offer be selling investors short? appeared first on The Motley Fool Australia. –

Sydney Airport Holdings Pty Ltd (ASX: SYD) shares have had a monumental week so far on the back of a proposed acquisition by a consortium of infrastructure investors and a super fund.

The Sydney Airport share price soared 33.9% on Monday after the indicative takeover proposal was released to the market. After finishing Friday’s previous session at $5.80, it reached $8.04 in intraday trade on Monday before closing at $7.78.

The airport’s share price dropped slightly, finishing Tuesday’s trade at $7.71. That’s still 32.9% higher than Friday’s close.

But does the $8.25 per share – roughly $22 billion in total – offered to Sydney Airport’s shareholders take the true value of the airport into consideration? Let’s take a look.

Are shareholders being ripped off?

Sydney Airport is one of only a handful of listed airports in the world. It sits 8 kilometres from the Sydney CBD, owns 7 hectares of land, and has what is effectively a 99-year lease which was signed in 2018, on the other 900 hectares it occupies.

It also has an approved commercial development plan that could see 2 hectares of business facilities built alongside its international terminal.

Right now, the Sydney Airport has a market capitalisation of around $21 billion.

However, in December 2019, while reports of a virus that would go on to be dubbed COVID-19 were beginning to swirl, the Sydney Airport share price hit an all-time high of $9.20.

If its share price was to reach that price again, the Sydney Airport’s market capitalisation would be roughly $24.8 billion.

According to reporting by the Financial Review, numerous experts agree that the offered amount is taking advantage of the pandemic’s effects and fails to account for the airport’s underlying worth.

The publication also claims the consortium might have to up its offer to convince one of Sydney Airport’s major shareholders, UniSuper. UniSuper owns roughly 15% of the company’s shares. The consortium’s offer is conditional upon it continuing to hold that level of investment in the airport.

Sydney Airport has yet to respond to the buyout offer. The question of whether its board believes the offer undervalues the airport will be answered in due time.

Sydney Airport share price snapshot

2021 hasn’t been a great year for ASX travel shares. Luckily, the Sydney Airport share price’s recent bump has herded it back into the green.

Currently, shares in Sydney Airport are 20% higher than they were at the beginning of this year. They have also gained 44% since this time last year.

The post Could Sydney Airport’s (ASX:SYD) buyout offer be selling investors short? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Sydney Airport right now?

Before you consider Sydney Airport, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Sydney Airport wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

Here are 3 ASX 200 shares that were on the move today

Sydney Airport (ASX:SYD) takeover bid indicates funds are looking forward
ASX 200 up, Sydney Airport soars, Airtasker rises

Here are 3 ASX 200 shares making moves on the share market today

Auckland Airport (ASX:AIA) share price jumps 6% on travel bubble news

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!