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Consortium takes the reins at Sydney Airport

written by Hannah Dowling | March 11, 2022

Qantas 737s parked at Sydney Airport, as shot by Victor Pody
Qantas 737s parked at Sydney Airport, as shot by Victor Pody.

The sale of Sydney Airport to a consortium of super funds and global investment partners has been finalised, with the airport officially removed from the ASX.

Sydney Aviation Alliance (SAA) group – made up of IFM Investors, QSuper, AustralianSuper and Global Infrastructure Partners – have now taken the reins at the airport, after completing the largest corporate takeover in Australian history.

It comes after 96 per cent of shareholders in the airport voted to accept the $23.6 billion takeover bid in February, with investors having now pocketed $8.75 per share, and the airport delisted from the ASX as of market close on Thursday.

“We are delighted to be investing in Sydney Airport on behalf of millions of Australians,” said IFM Investors chief executive and SAA spokesperson David Neal.

“Sydney Airport is a world-class infrastructure asset that plays an integral role in connecting Sydney and NSW with Australia and the world.”

Neal also said Sydney’s international gateway will benefit from SAA’s long-term capital and industry expertise.

“SAA looks forward to working closely with all stakeholders – including airlines, government and the community – to support the strong recovery of the global aviation industry,” he said.

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SAA has been eyeing the purchase of the airport since July 2021, when it first proposed a $22 billion takeover bid to the airport’s operators, which the board quickly rejected and dubbed “opportunistic”.

The consortium then in August raised its bid up to $22.8 billion, which was again swiftly rejected, causing the super funds to threaten to leave the negotiation table altogether. However, SAA ultimately came back with a final offer of $23.6 billion, equating to $8.75 per share.

The Sydney Airport board agreed to the sale at this price in November, which was later overwhelmingly approved by shareholders in February.

The move was widely expected given a number of proxy firms had already advised shareholders to accept the deal, which has also already been cleared by both the Australian Competition and Consumer Commission and the Foreign Investment Review Board.

Sydney Airport chairman David Gonski said the offer amounted to a significant premium and investors could avoid the dangers of competition from the new Western Sydney airport as well as future COVID waves.

“It is definitely not, in our view, a situation where an opportunity is being taken,” Gonski said. “One thinks just before the summer break in 2021 that things were coming good and look what happened.”

Neal said at the time, “Upon completion of the transaction, Sydney Airport will continue to be majority Australian-owned, with millions of working Australians to be invested in Sydney Airport through their superannuation.”

Last month, Australian Aviation reported that Sydney Airport has seen a $267 million loss for the full year to December 2021, drastically topping its 2020 full-year loss of $145 million.

It follows the airport’s $97 million half-year loss, reported in August.

The airport reported a 31.5 per cent drop in revenue from 2020 to 2021 to $630 million, down from the $919 million seen throughout 2020.

Sydney Airport said the result was driven by ongoing disruption to the air travel market throughout the year, due to travel restrictions and extended lockdowns in NSW and Victoria.

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