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The Sydney Airport (ASX:SYD) share price is up 20% so far in 2021. Here’s why

Following the increased attention, shares in the company will be under further scrutiny later this month.
The post The Sydney Airport (ASX:SYD) share price is up 20% so far in 2021. Here’s why appeared first on The Motley Fool Australia. –

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has had a stellar year thus far.

Shares in Australia’s largest airport started the year at around $6.30.

At the end of Friday’s trading session, Sydney Airport shares closed at $7.72.

Let’s take a look at what’s been fuelling the Sydney Airport share price.

Takeover offer fuelling Sydney Airport share price

Before July, the Sydney Airport share price was struggling along with the broader travel market in general.

With COVID-19-induced lockdowns halting most travel in Australia, shares in Sydney Airport were down more than 8% for the year at the start of July.

Thanks to a $22.6 billion buyout offer, shares in the infrastructure giant stormed into positive territory.

A consortium of infrastructure investors launched the takeover offer, valuing Sydney Airport at $8.25 per share.

The interested consortium comprised IFM Investors, Global Infrastructure Management, and QSuper.

Initially, Sydney Airport’s management noted that the takeover offer of $8.25 per share was below the $8.86 price the company’s shares were trading at before the COVID-19 pandemic.

The Sydney Airport share price received an additional boost after rumours swirled of a counter offer.

According to an Australian Financial Review (AFR) article, another consortium led by Macquarie Group Ltd (ASX: MQG) was considering a counter bid.

Sydney Airport formally rejected the takeover offer for 100% of its shares in mid-July.

Outlook for Sydney Airport

Sydney Airport has 100% interest in Australia’s largest international gateway. The company’s operations include aeronautical, retail, property, car rental and parking, and ground transport services.

According to another article published in the AFR, analysts noted the hidden value in Sydney Airport.

Analysts from Macquarie cited that the development of land owned by Sydney Airport could be a $900 million asset. This could result in the company’s shares gaining 33 cents.

In addition, the article noted that the company is currently charging Qantas Airways Limited (ASX: QAN) lower market rates for rent.

As a result, analysts believe that Sydney Airport’s share price could be lagging by a further 22 to 30 cents per share.

Following the increased attention, shares in the company will be under further scrutiny later this month.

Sydney Airport is slated to release its 2021 half-year results on Friday 20 August.

The post The Sydney Airport (ASX:SYD) share price is up 20% so far in 2021. Here’s why appeared first on The Motley Fool Australia.

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More reading

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Sydney Airport (ASX:SYD) offer shows infrastructure interest: expert
If you invested $2,000 in Sydney Airport (ASX:SYD) shares 10 years ago, here’s what it would now be worth
Why the Sydney Airport (ASX:SYD) share price will be one to watch
What’s being overlooked in the Sydney Airport (ASX:SYD) share price?

Motley Fool contributor Nikhil Gangaram 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 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.

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