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Saturday, June 25, 2022

Sydney Airport sale could be grounded over airline concerns

“That’s just making what is a series of individual monopolies [now] merging into one large monopoly around Australia. It’s making it incredibly difficult for airlines to be able to negotiate fair deals.”

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Professor Samuel said the proposed takeover also made a “nonsense” of the Airports Act, which limits common ownership of Sydney Airport along with Melbourne, Brisbane or Perth Airport.

IFM owns 25 per cent of Melbourne Airport and 20 per cent of Brisbane Airport and will own more than 15 per cent of Sydney under the proposed takeover. But that will be split between two separately managed infrastructure funds, a move that IFM argues will mean it is not in violation of the Airports Act.

Australian Super owns 10 per cent of Perth Airport, and QSuper owns a stake in Brisbane Airport through the Queensland Investment Corporation, which controls 25 per cent. UniSuper owns 7 per cent of Brisbane Airport and 49 per cent of Adelaide Airport.

The ACCC declined to comment while its review was ongoing.

Mr Gonski said the airport’s directors believed the deal reached “appropriate long-term value for the airport, and unanimously recommend the proposal to security holders”.

IFM chief executive David Neal said the bidding consortium would “work hard to bring more flights and passengers back to the airport as the aviation industry emerges from COVID-19.”

Sydney Airport said the deal values its equity at about $23.6 billion, which is $1.3 billion more than the consortium’s first bid in July and $7.9 billion more than the company’s closing market cap before receiving the offer. Including debt that the bidders will take on, the deal is worth $32 billion.

Sydney Airport’s shares closed 2.8 per cent higher at $8.46.

RBC Markets analyst Owen Birrell said the offer price was appropriate value for shareholders, on a 12-month view, given the airport faced long and uncertain recovery ahead from the pandemic.

“While the aviation market reopening has now commenced… the profile of the recovery and the time it will take to return to pre-COVID levels remains highly uncertain,” he said.

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