Will the investment giant make a play for Australia’s largest airport?
The post Macquarie (ASX:MQG) share price up amid news of rival bid for Sydney Airport appeared first on The Motley Fool Australia. –
Macquarie Group Ltd (ASX: MQG) shares finished in the green today following reports it’s considering an attempt to secure a buyout for Sydney Airport Holdings Pty Ltd (ASX: SYD) as part of a consortium. By market close, the Macquarie share price was trading 0.45% higher at $157.17.
Let’s dive into today’s developments regarding a potential new bidding war for Australia’s largest airport operator.
Macquarie share price outperforms on Thursday
The Macquarie share price managed to outperform the S&P/ASX 200 Index (ASX: XJO) today, which finished the session just 0.2% higher. This came following reports from various sources that Macquarie is weighing up the possibility of lobbing a rival bid for Sydney Airport.
By way of a quick recap, last Friday a consortium of infrastructure investors had proposed a $22 billion all-cash buyout offer for Sydney Airport. The original consortium, made up by the syndicate of IFM Investors, QSuper and Global Infrastructure Partners, made the offer at $8.25 per share, a roughly 42% premium to the Airport’s closing price last Friday afternoon.
Now, according to Bloomberg, investment bank powerhouse Macquarie is said to be considering throwing its hat in the ring, reportedly structuring its own pitch to comb in investors from its stand-alone business Macquarie Infrastructure and Real Assets.
Regardless of whether the company were to match or beat the original offer, the buyout would rank as Australia’s largest-ever acquisition and would be on the podium as one of the largest airport transactions ever recorded.
Macquarie, which holds $562 billion in assets under management at the time of writing, may also consider joining the original consortium trio if the rival bid fails to convert, Bloomberg reported.
The Macquarie share price jumped in early trading this morning, reaching an intraday high of $157.87 around midday, before making the walk south into negative territory and then recovering to its closing level in the green.
Today’s results extend the gains for Macquarie shares over the past 12 months, which have posted a return of ~29% over this period.
What does this mean for Sydney Airport?
Shares in the airport operator catapulted from the market open today, jumping from $7.61 straight up to $7.88 in the first 30 minutes of trading.
After that, Sydney Airport shares largely traded sideways, with little volatility, finishing the day 2.89% higher.
Sydney Airport shares also saw a huge swing to the upside on Monday this week when the buyout offer was first announced.
Immediately following Monday’s open, the company’s shares skyrocketed 37% into the green, and have extended these gains today.
Monday’s extreme share price action can be clearly seen on the 3-month chart below.
Chart Source: The Motley Fool
The Sydney Airport share price continues to remain under the magnifying glass, now that this potential new bidding war has surfaced.
Macquarie Group is reportedly still in the process of considering an offer, while the original offer of $22 billion in cash or $8.25 per share remains firmly on the table from the original consortium.
The Macquarie share price continues in the green over the past week, finishing up 0.14% at today’s close on the previous 5 days.
At the current market price, shares in Sydney Airport are still trading at a discount of ~5% to the original offer of $8.25 per share.
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Why the Sydney Airport (ASX:SYD) share price flew higher again today
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.