Sydney Airport has rejected the $22 billion takeover bid from a consortium of industry superannuation fund investors.
In a strongly-worded statement to the ASX, the business said its board “unanimously” rejected the “opportunist” offer, which it said took advantage of short-term COVID performance.
The decision was widely expected given the airport initially played down the bid from the group of organisations, which includes IFM Investors, QSuper and North American pension funds Global Infrastructure Management.
The board also cited the “diversity of Sydney Airport’s earnings”, value of its land assets and strong position to increase growth post-COVID as further reasons for holding firm on the $8.25-a-share proposal.
“The boards recognise that the security price is likely to trade below the consortium proposal’s indicative price in the short term, however, Sydney Airport will only progress a change in control transaction on terms that deliver and recognise appropriate long-term value for Sydney Airport securityholders,” said the business in a statement.
“The boards and management will continue to operate the airport with the objective of maximising long-term securityholder value.”
The rejection comes despite the airport announcing in February a full-year loss of $145 million, down from a $403 million profit a year earlier.
Data from FlightRadar24 reveals on Tuesday just 76 flights departed the airport, down from 270 on 18 June.
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.
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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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