Macquarie's airport plan gets nod

Macquarie Group shareholders have backed a proposal to distribute its $1.3 billion stake in Sydney Airport to investors, severing a long relationship between the bank and the country's biggest airport.

As part of an continuing push to bolster returns, Macquarie last month proposed to give the 340 million shares it owns in Sydney Airport directly to its investors. Shareholders will receive one share in Sydney Airport for each share held in the bank.

Although the airport stake has delivered the bank a healthy stream of dividends, analysts say these returns were below Macquarie's internal hurdles, after it stopped also collecting fees for managing the asset. There was little opposition to the plan at a special meeting in Sydney on Thursday, with more than 99 per cent of investors voting in favour. The decision follows a campaign by the bank to lift its return on equity after the demise of the "Macquarie model", which involved external funds that paid Macquarie healthy advisory and management fees.

With these drying up, the company has reviewed its assets with a view to offloading those that do not meet certain hurdles.

"The company's going back to its roots of being an investment bank," Bell Potter analyst T.S. Lim said. A Macquarie satellite fund first bought an 83 per cent stake in Sydney Airport when it was privatised in 2002, delivering Macquarie Group lucrative management fees until it stopped managing the asset in 2009.

Macquarie retained a 18.6 per cent stake in the listed entity that emerged out of Macquarie Airports, but these shares will be transferred to Macquarie investors next month.

The move will also deliver Macquarie a $265 million gain, based on its share price earlier this week. It is expected to lift its return on equity - 8.7 per cent in the latest half - by about 1 percentage point.

Before the vote, Macquarie chairman Kevin McCann urged shareholders to support the plan. "The board believes the proposed transaction is an equitable way of delivering the value of the Sydney Airport investment to Macquarie shareholders and is in the best interest of Macquarie shareholders," he said.