Sydney Airport target of $16.7 bn bid from infrastructure investors

A group of infrastructure investors has proposed one of Australia’s biggest-ever buyouts, a A$22.26 billion ($16.7 billion) purchase of Sydney Airport Holdings, taking a longer-term view on the pandemic-battered travel sector.

The proposal comes as record-low interest rates prompt pension funds and their investment managers to chase higher yields. The purchase, with an enterprise value of A$30 billion including debt, would allow them to reap financial benefits when borders reopen and travel demand rebounds.

If successful, the purchase of Australia’s biggest airport would rank as the eighth-biggest deal globally this year and the second-largest airport purchase, behind the $30.2 billion buyout of Britain's Heathrow Airport in 2006.

The Sydney Aviation Alliance — a consortium comprising IFM Investors, QSuper and Global Infrastructure Partners — has offered A$8.25 per Sydney Airport share, a 42 per cent premium to the stock’s Friday close.