Sydney Airport relented to suitors after extracting a sweetened A$23.6 billion ($17.4 billion) takeover offer that underscores the battered travel industry’s appeal to long-term investors.

The airport said Monday it will to open its books to bidders led by IFM Investors after they increased their indicative offer 3.6% to A$8.75 a share. Sydney Airport said it plans to accept the proposal if the suitors make it a binding offer after a few weeks of due diligence.

The Australian pension funds that own IFM are looking past the pandemic-induced travel crisis that has crushed returns at airports and airlines. Sydney Airport has a lease that runs until 2097 and is the nation’s largest airport and main international gateway, making it an attractive investment for pension funds with a long-term horizon.  

While a full global travel recovery may be years away, vaccination rollouts around the world are allowing commercial flying to tentatively resume in many markets. Qantas Airways Ltd., Australia’s biggest carrier, is preparing to restart international services in mid-December.

The sweetened offer was 9% higher than Sydney Airport’s closing price on Friday. The stock climbed 4.6% to A$8.37 on Monday in Sydney.

Sydney Airport, for its part, rejected two previous bids from the consortium, which started with an initial offer of A$8.25 a share in July. The two months of resistance forced the bidders to lift their offer by A$1.35 billion. That’s even with much of Australia still stuck in lockdown, leaving air travel decimated, as authorities fight a breakout of the delta variant. 

The increased offer is a good outcome for the airport, considering the uncertainty hanging over aviation’s recovery and looming competition from a new airport in the city’s western suburbs due to open in 2026, said Hugh Dive, chief investment officer at Atlas Funds Management in Sydney.

“Shareholders should be happy with the offer,” he said.

A deal at this level would be the second-biggest takeover in Australia following Square Inc.’s agreement last month to buy Afterpay Ltd. for $29 billion.

Sydney Airport’s largest shareholder, pension fund UniSuper Ltd., last month also publicly agitated for negotiations for a sale to start. The entire airport sector had been de-rated by the pandemic, and investors have other places to plant their money, Unisuper Chief Investment Officer John Pearce said in an interview at the time. 

Due diligence is expected to take four weeks, Sydney Airport said.