Sydney Airport (ASX:SYD) share price higher on new takeover offer

This airport operator has received an improved takeover approach…

Plane taking off from Sydney airport with CBD in background

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is pushing higher on Monday.

In morning trade, the airport operator's shares up 1% to $7.80.

Why is the Sydney Airport share price pushing higher?

Investors have been bidding the Sydney Airport share price higher today after providing an update on the Sydney Aviation Alliance takeover approach.

Last month the company announced the receipt of an indicative, conditional and non-binding proposal from the Sydney Aviation Alliance worth $8.25 per share.

This was unanimously rejected by the Boards of Sydney Airport less than two weeks later on the belief that it was opportunistic, undervalued the company, and was not in the best interests of shareholders.

According to today's release, the consortium has returned, with AustralianSuper as a new member, and made an improved offer.

The release explains that the Sydney Aviation Alliance consortium has increased its offer by 2.4% to $8.45 cash per share. This represents a 9% premium to the Sydney Airport share price at Friday's close.

Second time lucky?

Unfortunately for the consortium, it won't be a case of second time lucky for them.

The Sydney Airport Boards have carefully considered the revised indicative proposal, including obtaining advice from their financial and legal advisers. Once again, they have unanimously concluded that the proposal continues to undervalue Sydney Airport and is not in the best interests of shareholders.

They explained: "In coming to this conclusion, the current environment does not change the Boards' view of the long term value. The Boards also note the rapid increase and acceleration in Australian vaccination rates in recent weeks and the governments' plans to progressively ease restrictions as the population reaches vaccination targets which will then see the re-opening of travel."

"Sydney Airport remains strongly positioned, has strengthened its balance sheet and tightly managed costs to maintain flexibility to respond to a range of recovery scenarios and to pursue sensible growth opportunities as the recovery unfolds. At the current indicative price of A$8.45 per stapled security, the Boards continue to view the Revised Indicative Proposal as opportunistic in light of the COVID-19 pandemic," it said.

Though, it has stated that it is open to engaging with the Sydney Aviation Alliance should the consortium be prepared to lift its indicative price to appropriately recognise long term value for Sydney Airport shareholders.

The Sydney Airport share price is 21% in 2021.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Unsure man analysing data on laptop.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors endured a rough day of trading this Tuesday.

Read more »

A mature-aged couple high-five each other as they celebrate a financial win and early retirement
Share Gainers

Why this ASX 300 stock is soaring 12% after a disastrous year

This company has had a dramatic reversal of fortunes this Tuesday...

Read more »

A young woman wearing overalls and a yellow t-shirt kicks one leg in the air showing excitement over the latest ASX 200 shares to hit 52-week highs
Share Gainers

Why Core Lithium, Imugene, Lifestyle Communities, and Mineral Resources shares are charging higher

These shares are having a good session. What's going on?

Read more »

A young woman smiles as she rides a zip line high above the trees.
Share Gainers

4 ASX All Ords shares up 315% to 682% in a year!

Investors have sent these ASX All Ords shares flying higher. But why?

Read more »

Man standing on rock next to turquoise salt lagoon.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors enjoyed a great start to the trading week today.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Share Gainers

Why Austal, Breville, Telix, and Westgold shares are pushing higher today

These shares are starting the week positively. But why?

Read more »

A couple sits on a sofa, each clutching their heads in horror and disbelief, while looking at a laptop screen.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors endured a rough Friday to close the trading week today.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Pointsbet, Qantas, Serko, and Yandal shares are pushing higher today

These shares are avoiding the market selloff today. But why?

Read more »