Log in
Show password
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
  1. Homepage
  2. Equities
  3. Australia
  4. Australian Stock Exchange
  5. Macquarie Group Limited
  6. News
  7. Summary
    MQG   AU000000MQG1


SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Sydney Airport rejects $17 billion buyout proposal amid deal frenzy

07/14/2021 | 11:48pm EDT
FILE PHOTO: People walk through the domestic terminal at Sydney Airportin Sydney, Australia

SYDNEY (Reuters) - Sydney Airport Holdings Pty Ltd said on Thursday it would reject a A$22.26 billion ($16.6 billion) takeover proposal from a group of infrastructure funds, the biggest of a frenzy of Australian deals fuelled by record-low interest rates.

The operator of Australia's largest airport said directors had unanimously concluded the proposal undervalued the airport and was not in the best interest of shareholders. If successful, it would have been one of Australia's biggest buyouts.

Record-low interest rates have prompted pension funds and their investment managers to chase higher yields, leading to recent asset purchases from Telstra Corp and Qube Holdings.

Electricity poles-and-wires company Spark Infrastructure Group rejected a A$4.91 billion buyout proposal from private equity firm KKR & Co Inc and Ontario Teachers' Pension Plan Board but left open the chance of some engagement.

Last week, the Sydney Aviation Alliance, a consortium of IFM Investors, QSuper and Global Infrastructure Partners offered A$8.25 a share, for a premium of 42% to pandemic-ravaged Sydney Airport's last trading price before the offer.

Shares of Sydney Airport were flat at about A$7.80, a sign the market expects further negotiations.

The proposal is contingent on a board recommendation and access to due diligence. Sydney Airport said its board would only accept a buyout deal that would "deliver and recognise appropriate long-term value".

"The board is obviously trying to play hardball, but we do think it's a pretty unique long-dated asset so we are supportive of their decision so far," Andy Forster, a portfolio manager at Argo Investments, a top-20 investor in the airport, told Reuters.

In a statement, the Sydney Aviation Alliance said it was "surprised and disappointed" by the rejection, but did not say if it had ruled out a higher offer.

The Australian government has a foreign ownership cap of 49% on airport operators. IFM, QSuper and UniSuper are Australian, while Global Infrastructure Partners is from the United States.

Sydney Airport is Australia's only listed airport operator and a purchase would be a long-term bet on the travel sector. The city's lockdown will run at least two more weeks after a rise in COVID-19 infections.

A successful deal would bring its ownership in line with the country's other major airports, which are owned by consortia of infrastructure investors, primarily pension funds.

Australia's mandatory retirement savings system, known as superannuation, has assets of A$3.1 trillion, according to the Association of Superannuation Funds of Australia.

A Sydney Airport purchase, with an enterprise value of A$30 billion including debt, would position it to reap financial benefits when borders reopen.

If successful, the purchase would be one of Australia's largest by enterprise value in U.S. dollar terms, on par with the $22-billion purchase of mall operator Westfield Group by Unibail-Rodamco in 2017, Refinitiv data showed.

It would require the approval of the Foreign Investment Review Board and Australia's competition regulator.

Cross-ownership rules may compel IFM to sell down a portion of its holdings in other major Australian airports, Morgan Stanley analyst Rob Koh said.

"It may be there is a series of further airport transactions as a result of this," Koh said at a CAPA Centre for Aviation event on Wednesday, adding that co-owners who probably have pre-emptive rights would be logical buyers.

Last week, Bloomberg News said a consortium led by Macquarie Group was considering a rival offer, citing unidentified sources. With talks at an early stage, Macquarie could also consider joining the Sydney Aviation Alliance, it added.

In a note, Credit Suisse analysts said there was potential for other bidders, such as Macquarie, Australia Super and the Future Fund, to get involved. Macquarie once owned Sydney Airport and the rest have stakes in other Australian airports.

($1=1.3407 Australian dollars)

(Reporting by Jamie Freed and Paulina Duran; Editing by Stephen Coates and Clarence Fernandez)

By Jamie Freed and Paulina Duran

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
ARGO INVESTMENTS LIMITED -0.11% 8.95 End-of-day quote.6.93%
KKR & CO. INC. -2.42% 60.06 Delayed Quote.51.96%
MACQUARIE GROUP LIMITED 0.16% 181.07 End-of-day quote.30.76%
MORGAN STANLEY -2.58% 102.415 Delayed Quote.53.36%
QUBE HOLDINGS LIMITED -1.22% 3.25 End-of-day quote.10.54%
SPARK INFRASTRUCTURE GROUP 0.36% 2.81 End-of-day quote.33.18%
SYDNEY AIRPORT LIMITED -0.72% 8.22 End-of-day quote.28.24%
TELSTRA CORPORATION LIMITED -1.26% 3.93 End-of-day quote.31.88%
UNIBAIL-RODAMCO-WESTFIELD SE -4.33% 66.93 Real-time Quote.8.33%
09/27Endeavor to buy sports betting unit from Scientific Games for $1.2 bln
09/27HIGH PEAK ROYALTIES : Raises More than $580,000 Via Oversubscribed Placement
09/27EQT : Planning to Sell GETEC Stake in $4.7 Billion Deal
09/24BW OFFSHORE : JV Receives Regulatory Approval
09/23PUBLIC POWER S A : Macquarie named preferred bidder for stake in Greek power grid operator..
09/23KINCORA COPPER : Says Porphyry System Extended at Trundle Park in Australia
09/23CHINA EVERGRANDE : mom-and-pop investors, builders and homebuyers caught in Evergrande deb..
09/22HARDLY EVERGRANDE : China's economy seen needing more support as curbs on property and tec..
09/21MACQUARIE INFRASTRUCTURE : Shareholders Approve Sale of Aviation Unit, Merger of Hawaii Bu..
09/20Karoon looks to grow in Brazil with own oil fields, acquisitions
More news
Analyst Recommendations on MACQUARIE GROUP LIMITED
More recommendations
Sales 2022 13 786 M 9 984 M 9 984 M
Net income 2022 3 396 M 2 460 M 2 460 M
Net Debt 2022 65 734 M 47 604 M 47 604 M
P/E ratio 2022 20,2x
Yield 2022 3,05%
Capitalization 64 059 M 46 389 M 46 392 M
EV / Sales 2022 9,41x
EV / Sales 2023 11,5x
Nbr of Employees 16 459
Free-Float 92,6%
Duration : Period :
Macquarie Group Limited Technical Analysis Chart | MQG | AU000000MQG1 | MarketScreener
Technical analysis trends MACQUARIE GROUP LIMITED
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 12
Last Close Price 181,07 AUD
Average target price 176,93 AUD
Spread / Average Target -2,29%
EPS Revisions
Managers and Directors
Shemara Wikramanayake Chief Executive Officer, MD & Executive Director
Alex H. Harvey CFO & Head-Financial Management Group
Peter Hastings Warne Independent Chairman
Nicole Sorbara COO & Head-Corporate Operations Group
Diane Jennifer Grady Independent Non-Executive Director
Sector and Competitors
1st jan.Capi. (M$)
NATIXIS0.00%15 086
SBI HOLDINGS, INC.15.04%6 200