Airport to seal $1.2b buyout
Sydney Airport will buy out its minority shareholders in a $1.2 billion deal that will simplify its complex structure and make it easier for cornerstone investor Macquarie Group to eventually sell out.
The country's largest airport has also opted to settle a case with the Tax Office by paying $69 million in tax and interest. The settlement removes a uncertainty that has been hanging over the stock.
As part of the move to demystify its structure, the airport will buy out the remaining 15.2 per cent it does not already own. This will be done via a share-swap to minorities who want to remain investors in the company, while those who want to sell out will be paid cash.
The deal, announced on Wednesday, will also result in the foreign-ownership cap on Sydney Airport rising from 40 per cent to 49 per cent.
Legg Mason research analyst Andrew Chambers said the change to the cap would make it easier for Macquarie, which has a 22 per cent stake, to exit the register in the longer term. "It allows more room for foreign investors to acquire stakes ... and increases the likelihood of the Macquarie stake to be transacted," he said.
Sydney Airport chief executive Kerrie Mather said the deal helped to provide more certainty to investors, highlighting the rise in the foreign-ownership cap.
The minority shareholders who will remain include the Future Fund, MTAA Super and UniSuper, and Canadian pension fund PSP Investments.
A halt to trading in the airport's securities will be lifted on Thursday, after a $300 million-plus capital raising. The money raised will be used to pay cash to those minority shareholders who want to sell out.
InvestSMART FORUM: Come and meet the team
We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free