By Mike Cherney
SYDNEY--Sydney Airport rejected a takeover bid from a consortium of infrastructure investors, saying the offer price is too low given the long-term value of Australia's biggest airport.
The consortium--which comprises Australian pension fund managers IFM Investors and QSuper as well as New York-based Global Infrastructure Partners--had offered 8.25 Australian dollars (US$6.18) per share for the airport, valuing it at nearly US$17 billion. That offer was at a significant premium to the recent closing price but below where the shares had traded before the coronavirus pandemic decimated global travel.
In rejecting the bid, Sydney Airport said the airport is one of Australia's most important infrastructure assets that serves as the gateway for many international travelers, and that it has a long-term concession lease and has historically delivered significant shareholder returns.
The airport also highlighted that the offer price was below the pre-pandemic price and that the airport would deliver growth again once the pandemic subsides.
"Sydney Airport is strongly positioned to deliver growth as vaccination rates increase and we move into the post-pandemic recovery period," the airport said, adding that its land assets also have the potential to create value in the long term.
Sydney Airport shares rose more than 30% to A$7.78 when the offer was announced earlier this month. Shares closed most recently at A$7.80.
Some investors previously said the offer was too low and that the consortium was taking advantage of the fact that the airport's shares had lagged the performance of some other publicly traded airports recently given Australia's strict border-closure policy during the pandemic. Health experts have credited the policy with limiting the spread of Covid-19 there, but the airport's international traffic remains down more than 90%.
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(END) Dow Jones Newswires