Sydney Airport (ASX:SYD) jumps 37% on $22.6 billion buyout bid

Shares in Australia’s largest airport operator are flying high on the news this morning.
The post Sydney Airport (ASX:SYD) jumps 37% on $22.6 billion buyout bid appeared first on The Motley Fool Australia. –

The Sydney Airport (ASX: SYD) share price is rocketing this morning after the company announced that a consortium of infrastructure investors had proposed a $22.6 billion all-cash transaction for the buyout of Sydney Airport.

The Sydney Airport share price has started this morning’s session with a 37% jump into the green after the opening bell, before retreating slightly to the current price of $7.71, up 32.62%.

Let’s dive into what unfolded this morning.

What is the proposed deal?

In today’s release, the company advised that a consortium of infrastructure-focused investors from IFM Investors, Global Infrastructure Management and QSuper had offered $8.25 per share for a buyout of the famed Australian airport.

At these figures, the offer price represents a 42% premium on Sydney Airport’s closing price of $5.81 at the bell on Friday.

Sydney Airport also holds debt valued at close to $10 billion on its balance sheet — which the consortium must absorb — taking the company’s enterprise value to $30 billion and change.

The investor consortium mentioned its deal included a number of conditions. These included:

UniSuper to reinvest its roughly 15% stake into the holding vehicle;
Sydney Airport to provide access to the company books;
A unanimous recommendation from the Sydney Airport boards that securityholders back the proposal; and
Entry into a mutually acceptable scheme implementation deed between Sydney Airport and a company owned by the consortium members.

A move to proceed with the sale would align Sydney Airport with Australia’s other major airport operators, which are owned by consortiums of infrastructure investors.

What did Sydney Airport say?

Sydney Airport was quick to respond, claiming that the offer sat below its pre-pandemic share ranges when it hit a record high of $8.86 back in January 2020, before the COVID-19 pandemic took its toll on global travel.

In a release, it stated:

The boards are undertaking detailed analysis of, amongst other things, whether the proposal is reflective of the underlying value of the airport given its long-term remaining concession and the unexpected short-term impact of the pandemic.

At the time of writing, Sydney Airport is considering the proposal.

Sydney Airport share price snapshot

Today’s price action has catapulted the Sydney Airport share price into the green after closing in the red over the previous 5 days. Shares in the airport are now up 40.29% over the past 12 months and have lifted 20.44% year-to-date.

At a share price of $7.73, Sydney Airport has a market capitalisation of $15.7 billion and trades at a price-to-earnings ratio of 92.

The share price is trading near its 52-week high of $8.04, and has a 52-week range of $4.99 – $8.04.

The post Sydney Airport (ASX:SYD) jumps 37% on $22.6 billion buyout bid appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

ASX 200 up 0.1%: Sydney Airport takeover, Tabcorp demerger, a2 Milk jumps

ASX 200 Weekly Wrap: ASX finishes FY21 on a high

Broker names 2 ASX dividend shares to buy

3 worst ASX travel shares of financial year 2021

Temple & Webster share price surges with other ASX COVID winners

Zach Bristow 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!