Sydney Airport has rejected an improved takeover offer from a group of infrastructure investors, but says it is willing to talk should the buyers want to raise the price.

Consortium Sydney Aviation Alliance increased the indicative price to A$8.45 ($6.19) cash per share, up from a previous rejected offer of A$8.25. The new offer values the company at A$22.8 billion ($16.72 billion), up from the previous offer of A$22.3 billion. Its shares traded at A$7.70 on August 16, 2021. 

Sydney Airport said it had reviewed the new offer but concluded that it still undervalued the  company and was not in the best interest of shareholders. It described the offer as “opportunistic” in light of the COVID-19 pandemic. 

“The boards are 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 security holders,” the airport said, leaving the door open for talks and a new offer.

Explaining the decision to reject the revised bid further, Australia’s largest airport said it remained strongly positioned, had strengthened its balance sheet and tightly managed costs to be able to take advantage of recovery from the pandemic.

It also highlighted rising vaccination rates in Australia.  

“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,” the airport said in a stock exchange statement. 

Sydney Airport saw 989,000 passengers in June 2021, down 71% on the same month in 2019. Of those, just 83,000 were international passengers, equivalent to 6% of pre-Covid levels. The airport also noted that before the travel bubble with New Zealand was closed on June 23, 2021, passenger traffic on trans-Tasman routes had returned to more than 40% of pre-crisis levels. 

AustralianSuper Pty, a trustee of Australian Super, has also joined the consortium, whose other members are IFM Investors, Conyers Trust Company, QSuper Board, and Global Infrastructure Management. 

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Infrastructure investors propose a A$22.3 billion ($16.8 billion) buyout bid for the operator of Sydney International Airport (SYD).