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Takeover target Sydney Airport’s biggest shareholder says it is in investors’ interests for a deal to be done at a fair price, warning the shares could plunge if the buyers walk away.
Sydney Airport’s board this week rejected a non-binding $8.25-a-share bid for the company from a superannuation fund consortium, but still left the door open to a higher bid for the prized infrastructure asset.
UniSuper chief investment officer John Pearce, who oversees the fund’s 15.3 per cent stake in the airport, said on Friday the board faced a delicate balancing act. It was “totally predictable” the board would try to extract the highest possible price for shareholders, and it seemed that if the bidders wanted access to the airport’s books, they would need to lift their offer. But suggestions the airport was worth $9 a share were too optimistic, he said.
“The last thing all shareholders want would be a deal falling over and then the price wallowing back below $6,” Mr Pearce said. “It’s our preference that a deal gets done.”
Sydney Airport’s biggest shareholder UniSuper wants a takeover deal to go ahead.Credit:James Brickwood
In response to the initial bid for the company, which was made at a 42 per cent premium, Sydney Airport shares last week soared by a third after previously trading under $6. On Friday, the stock gained 1.3 per cent to $7.91, its highest close since February last year.
The super funds’ bid for the airport is conditional on UniSuper retaining its stake in the airport, and the fund has previously indicated it would support the asset being delisted from the sharemarket.
‘The last thing all shareholders want would be a deal falling over and then the price wallowing back below $6. It’s our preference that a deal gets done.’
UniSuper CIO John Pearce
In its response to the offer, the airport’s board has pointed out the bid is below Sydney Airport’s pre-pandemic highs of almost $9 a share, and some fund managers have also argued a price of about $9 a share would be closer to the mark.
However, Mr Pearce suggested this was not realistic due to the hit to the airport from COVID-19, and last year’s $2 billion equity raising.