Sydney Airport could be taken over after bidders sweetened an indicative takeover offer, drawing a more positive response from the operator.

Sydney Airport said in a statement on September 13, 2021, that consortium Sydney Aviation Alliance had improved the price it is willing to offer to A$8.75 ($6.43) per share. The new offer values the company at A$23.6 billion ($17.4 billion).

The consortium had previously made offers of A$8.25 ($6.06) and A$8.45 ($6.21), both of which were rejected by Sydney Airport.

With the new offer, the airport has therefore agreed to provide detailed information on its finances to the bidder, a process known as due diligence. The due diligence process is expected to take four weeks once a non-disclosure agreement has been signed. 

Sydney Airport said that if the due diligence process led to a binding offer, and once it had assessed that offer, then it planned to recommend investors agree to a takeover, unless a better offer was made.

“The Boards note that there is no certainty that the Further Revised Indicative Proposal, or provision of access to the Consortium to conduct due diligence, will result in a binding offer for Sydney Airport,” it commented in the statement.

Sydney Airport is still feeling the full effects of the pandemic. Passenger numbers in the first half reached 6 million, down 72% from pre-pandemic levels. Revenue was down 57% from 2019 at A$342 million ($252 million), while earnings before interest, tax, depreciation and amortisation are also down 55% at A$211 million ($155 million). 

While domestic traffic had been recovering over the first half of the year, further lockdowns in Australia and the suspension of the trans-Tasman bubble impacted July traffic. The airport welcomed 102,000 passengers in July 2021, representing just 3% of pre-crisis levels.

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Sydney airport has rejected a higher takeover bid from a consortium, but says it is open to talks should the investors want to raise the offer.