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Sydney Airport Receives $17 Billion Takeover Bid, Sending Shares Soaring

Sydney Airport said Monday it has received a A$22.3 billion ($17 billion) takeover bid from a group of infrastructure investors, sending its shares soaring on the Australian bourse.

The consortium—comprising of IFM Investors, QSuper Board and Global Infrastructure Management LLC—is seeking to buyout Australia’s largest airport operator at A$8.25 a share, Sydney Airport said in a statement to the Australian Stock Exchange. The offer is at a 42% premium from the stock’s closing price on Friday, sending the share price surging more than 30% in ASX trading.

The offer is a significant bet on the recovery of the global aviation industry, which has been upended in the past year as government around the world closed off their international borders to curb the spread of the Covid-19 pandemic. Sydney Airport reported that total passenger traffic in May fell 59% in May compared to the same period in 2019.

The consortium members are invested in airports across Australia and the U.K. IFM holds stakes in airports in Melbourne, Brisbane, Perth and Adelaide, while QSuper owns a stake in London’s Heathrow Airport and Global Infrastructure is invested in Gatwick and London City airports.

The consortium’s offer is conditional among others on UniSuper—owner of a 15% stake in Sydney Airport—agreeing to reinvest its equity interest in Sydney Airport for an equivalent stake in the group’s holding company.

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Sydney Airport said its board is assessing “whether the proposal is reflective of the underlying value of the airport given its long-term concession and the expected short-term impact of the pandemic.”

Australia’s international borders has been closed since March last year as the government continues to grapple with rising infections in its biggest cities including Sydney, which imposed a further two-week lockdown on June 26.

The Sydney airport has a monopoly on traffic coming in and out of Australia’s most populous city until the Western Sydney Airport opens in 2026.

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