• Sydney Airport won’t be bought for $22.3 billion after rejecting an unsolicited takeover bid.
• On Thursday, the Airport’s board members said they had unanimously voted down the offer from Australian superannuation funds.
• The company rejected it on the basis it undervalued the “irreplaceable” asset and was made with “opportunistic timing” as Sydney remains locked down and flights are slashed.
• Visit Business Insider Australia’s homepage for more stories.

Australia’s largest international gateway says it wants to see through the pandemic, and won’t take kindly to lowball offers.

On Thursday Sydney Airport rejected an unsolicited $22.3 billion takeover bid from a consortium of the super funds and US investors.

Yet despite having mulled it over for two weeks, the publicly-listed asset was reproachful of what it deemed an unfair offer with “opportunistic timing”. It was lobbed by IFM Investors, QSuper and US investment fund Global Infrastructure Partners (GIP), which collectively manage around $360 billion between them.

“The Boards have unanimously concluded that the indicative proposal undervalues Sydney Airport and is not in the best interests of securityholders,” Sydney Airport said in a statement.

The COVID-19 pandemic has all but brought its international and domestic terminals to a halt since March last year, with the share price almost halving in the first month of the pandemic in anticipation of what was eventually a $145 million full-year loss.

Amid subdued optimism surrounding reopened borders and a travel resurgence, the share price has hovered around the $6 mark for the better part of the year, hurt further by rolling lockdowns and slashed arrival caps.

In fact, it has only really taken off on the news it could be bought out at a large premium – at $8.25 a share.

But having fallen initially from almost $9, Sydney Airport has rejected the idea it could be bought up below fair value, as it talks up its long-term potential.

On Thursday, it boasted of “the strategic and irreplaceable nature of Sydney Airport which is a world class airport and one of Australia’s most important infrastructure assets.”

Declining the offer out of the interest of shareholders, the Airport said it remains “a well managed and capitalised asset with a long term concession lease”, and revealed it is betting that rising vaccination rates indicate a post-pandemic era is around the corner.

Significantly, the company did not rule out future offers though, affirming it would seriously consider those that “deliver and recognise appropriate long term value” for shareholders.

With Macquarie Bank reportedly scouting for a second group of interested parties, it could still be in the hunt, as long as it comes armed with a big bag of cash.

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