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Super funds make $22bn bid for Sydney Airport

written by Adam Thorn | July 5, 2021
Sydney Airport shot from the air by Victor Pody
Sydney Airport shot from the air by Victor Pody

Sydney Airport has received a $22 billion takeover bid from a consortium of industry superannuation fund investors.

However, the business played down the opening offer in a statement to the ASX, stating the valuation is below its pre-pandemic value.

It comes after Sydney Airport in February announced a full-year loss of $145 million, down from a $403 million profit a year earlier.

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“The Sydney Airport Boards note that Sydney Airport is a world class airport and one of Australia’s most important infrastructure assets,” the business said in a statement.

“Sydney Airport is Australia’s largest airport and is the gateway to international travel in and out of Australia.

“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.”

The consortium – which includes IFM Investors, QSuper and North American pension funds Global Infrastructure Management – valued the airport at $8.25 a share, 40 per cent more than its price on Friday.

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IFM Investors alone manages more than $150 billion in assets, and is owned by Australian Super, Cbus, HESTA and Hostplus. It also owns 25 per cent of Melbourne Airport, 20 per cent of Brisbane Airport, 13 per cent of Adelaide Airport, and a stake in Perth.

The news caused shares to soar 30 per cent to $7.55 at the time of writing.

Upon announcing its full-year results earlier this year, the business revealed the COVID pandemic caused traffic to fall 75 per cent compared with 2019, at 11.2 million, however that dropped to 93 per cent after March 2020.

The airport also made around 20 per cent of its total workforce redundant in August 2020.

Despite the slump, chief executive Geoff Culbert said then he was “cautiously optimistic” that the industry would recover this year.

“As difficult as the crisis has been, I’m proud of the way we kept the airport open as an essential service and protected the business and everyone who works across the airport precinct,” said Culbert.

“We moved quickly to control the things that were in our control and put ourselves in a position to manage the unpredictability and volatility that became our ‘new normal’. The actions we took, combined with the COVID-19 vaccines rolling out, mean we have laid the foundation for our recovery through 2021 and beyond

“The recovery won’t be linear, but our experience shows that when restrictions are eased and borders come down, people are keen to travel.

“We take great confidence from our financial and operational response to COVID-19, which puts us in a strong position to manage through to the recovery and make the most of it when it arrives.”

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2 Comments

  • Byron

    says:

    Hold out to get a ‘pre-pandemic’ price. Good luck with that.
    Yet another person not realising this virus is with the human race forever.
    There’ll be NO going back to life as it was prior pandemic.
    We’ve to live with this, the same way we do with Influenza, & other diseases’.

  • Markus

    says:

    Just think. Less than 20 years ago, the Liberal party sold the airport for just $5.6 Billion.

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