Sydney Airport rejects improved $16.8b buyout bid, open to higher offer

Sydney Airport Holdings Monday rejected an improved A$22.80b ($16.81b) bid from a group of infrastructure investors, saying that it undervalued the airport operator, but that it was open to a higher offer. The new offer valued Sydney Airport at A$8.45 per share, 2.4% higher than the previous offer of A$8.25 a share, and a more than 9% premium to the stock's Friday close. Shares were steady in afternoon trading on Monday, with the increased price below market expectations of closer to A$9 a share. A successful takeover would be among the largest buyouts ever of an Australian firm and underline a year of stellar deal activity, that has already seen a mega $29b buyout of Afterpay by Square. But it would require Sydney Airport to allow due diligence as well as receiving approvals from shareholders, the competition regulator and the Foreign Investment Review Board, a process that typically takes months. The unanimous board rejection comes a month after the airport operator turned down an initial bid from the Sydney Aviation Alliance (SAA), a consortium of Australian investors IFM Investors and QSuper and US-based Global Infrastructure Partners. Record-low interest rates have prompted pension funds and their investment managers to chase higher yields.<br/>