Sydney Airport will open its books to a group of suitors after they sweetened their takeover offer to A$23.6 billion ($17.4 billion).
Bidders led by IFM Investors increased their offer to A$8.75 a share from A$8.45, the airport said Monday. It plans to recommend shareholders accept the bid if, following due diligence, the consortium turns it into a binding offer and the conditions are acceptable.
The latest offer is pitched at a 9% premium to Sydney Airport’s closing price on Friday.
After being hammered by coronavirus restrictions that decimated travel, Sydney Airport is finally relenting after rejecting two previous bids from the consortium.
The airport had previously argued that vaccination rollouts around the world would allow travel to resume. But the outlook has darkened since the suitors’ first approach in July, and Sydney Airport’s largest shareholder last month publicly agitated for negotiations for a sale to start.
While Qantas Airways Ltd. is preparing to restart international services in mid-December, much of Australia has been stuck in lockdown for weeks as authorities struggle to contain a breakout of the delta variant. That’s delaying an aviation recovery and increasing the pressure on Australia’s biggest travel hub.
Due diligence is expected to take four weeks and there’s no guarantee the process will lead to a deal, the airport said.
IFM is an infrastructure investor owned by 23 Australian pension funds.
