Sydney Airport share price: where next after new $8.45 takeover bid?

Sydney Airport share price trades flat as Board remains resolute that new takeover bid continues to undervalue the business.

In July, Sydney Airport (ASX: SYD) rejected a consortium of infrastructure investor’s ~$22.3 billion takeover bid for the airport – arguing that it undervalued the company.

That cash takeover offer price was raised to $8.45 per share by the consortium of Monday, but not much else changed.

Indeed, despite that revised offer, Sydney’s Board yet again rejected the offer, saying it undervalued the company and that such a deal was not in the best interest of shareholders.

Sydney Airport share price

The market reacted in quite a peculiar fashion: The stock fell sharply within the first half-hour of trade, touching $7.61 per share, before quickly rebounding to trade flat into the afternoon session. Overall however, at the time of writing the stock remained sharply up from the price it traded at prior the takeover bid announcement.

This seems to strongly suggest that the market believes that the consortium of infrastructure investors will eventually raise their bid to a price amenable to Sydney Airport’s Board. Whether that plays out in reality, remains to be seen.

Nothing to see here

In rejecting that upped offer, Sydney Airport’s management reiterated many of the same lines they did the first time around. The Board again described the takeover bid as opportunistic and argued that the offer simply undervalues the company, despite the current covid-19 situation in Australia.

Indeed, with New South Wales, Victoria, and ACT now all locked down – whether a company is in the aviation sector or not – challenges remain both complex and their timelines, uncertain.

But Sydney’s Board brushed such points aside, highlighting instead the growing vaccination rates and its long-term value trajectory, as two key points of optimism for the business.

'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.'

Beyond such macro-considerations that would likely buoy the stock, the Board also stressed the airport’s strong financial position, saying:

'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.'

Looking ahead, the door remains open for potential future takeover bids. Here, Sydney Airport’s Board said:

'The Board are open to engaging with the Sydney Aviation Alliance should the Consortium be prepared to lift its indication price to appropriately recognise long term value for Sydney Airport Securityholders.'

Finally and in other news, Sydney Airport is set to release its interim results this Friday, August 20.

Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.