As the IFM-led consortium plays hard ball with Sydney Airport in its bid for the international gateway into Australia’s largest city, the price paid in the last Australian airport transaction is looming large.
Queensland Investment Corporation and the Dutch government-backed Schiphol, which owns Amsterdam Airport, bought a 70 per cent stake Hobart Airport in 2019 for $600m, valued the asset at 29 times its annual earnings.
The latest IFM-led offer for Sydney Airport is about 22.5 times.
One would argue that the Hobart airport was not sold in the middle of a pandemic.
However, it is also worth remembering that Sydney Airport is one of the most prized airport assets in the world and the largest in Australia.
Market sources believe that the consortium will sweeten the deal.
Qsuper is bidding for the airport along with IFM, AustralianSuper and Global Infrastructure.
The airport’s 15 per cent shareholder UniSuper is believed to be planning to roll into the offer if it is accepted.
QSuper is Queensland Investment Corporation’s largest client.
The consortium last Monday increased its offer for Sydney Airport from $8.25 to $8.45 per share, with the offer now valuing the asset at $22.8bn.
The proposal was rejected as too low, a view that was also taken by Sydney Airport’s institutional investors.
Some found it interesting that the consortium, known as the Sydney Aviation Alliance, said in a statement that Sydney Airport was facing “short, medium and long term challenges” and that it faced “expected long term changes in business and consumer travel preferences”.
IFM owns a 25 per cent interest in Melbourne Airport.
Apparently, its management have been telling fund investors that the airport will recover in the short term.
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