IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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<p><a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a> is Australia’s largest airport and the only listed airport on ASX. Sydney Airport has granted a consortium (Sydney Aviation Alliance) non-exclusive due diligence access based on a further revised indicative proposal of A$8.75 cash per share. The revised indicative offer is A$8.75 per share is a 52% premium to the unaffected price of A$5.75 (1 July). The revised indicative offer is also a marginal 3.6% bump to the first revised offer of A$8.45 per share received from the consortium on 16 August.</p><p>Pushing for a better price is part of the M&amp;A game. The Board were said to be seeking a price around A$9.00 per share, according to press reports. However, the Board faced increasing shareholder pushback to engage with the consortium and facilitate due diligence. The consortium viewed A$9.00 per share as excessive but shareholder feedback suggested that the price of A$8.75 per share would get the Board onside. UniSuper, the largest independent shareholder, will rollover its shares instead of receiving cash under the scheme and will be required to vote as a separate class on the scheme. </p><p>The Board intends to recommend the revised offer subject to a binding scheme implementation agreement and no superior offer. The due diligence which is expected to take four weeks should be relatively straightforward due to the consortium’s expertise in airport infrastructure. The deal requires regulatory approval from the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board. The ACCC will commence a review of the proposed transaction “<em>in due course</em>” and the review should take about three months to complete. The shareholder vote for approval is likely to be held in 1Q22. </p><div class="content-highlight"><p>Overall, we think that the further revised indicative offer is attractive and marginally above the pre-COVID-19 rights adjusted share price high reached in December 2019. The offer will prove attractive to shareholders who are looking for valuation certainty in an environment where the pace of the recovery in international air travel remains unclear. At the last close price of A$8.23, the shares are trading at a 6.3% gross spread to the indicative offer.</p></div>

Sydney Airport (SYD AU) is Australia’s largest airport and the only listed airport on ASX. Sydney Airport has granted a consortium (Sydney Aviation Alliance) non-exclusive due diligence access based on a further revised indicative proposal of A$8.75 cash per share. The revised indicative offer is A$8.75 per share is a 52% premium to the unaffected price of A$5.75 (1 July). The revised indicative offer is also a marginal 3.6% bump to the first revised offer of A$8.45 per share received from the consortium on 16 August.Pushing for a better price is part of the M&amp;A game. The Board were said to be seeking a price around A$9.00 per share, according to press reports. However, the Board faced increasing shareholder pushback to engage with the consortium and facilitate due diligence. The consortium viewed A$9.00 per share as excessive but shareholder feedback suggested that the price of A$8.75 per share would get the Board onside. UniSuper, the largest independent shareholder, will rollover its shares instead of receiving cash under the scheme and will be required to vote as a separate class on the scheme. The Board intends to recommend the revised offer subject to a binding scheme implementation agreement and no superior offer. The due diligence which is expected to take four weeks should be relatively straightforward due to the consortium’s expertise in airport infrastructure. The deal requires regulatory approval from the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board. The ACCC will commence a review of the proposed transaction “in due course” and the review should take about three months to complete. The shareholder vote for approval is likely to be held in 1Q22. Overall, we think that the further revised indicative offer is attractive and marginally above the pre-COVID-19 rights adjusted share price high reached in December 2019. The offer will prove attractive to shareholders who are looking for valuation certainty in an environment where the pace of the recovery in international air travel remains unclear. At the last close price of A$8.23, the shares are trading at a 6.3% gross spread to the indicative offer.

Sydney Airport’s Further Revised Offer Gets the Board’s Approval

External broker reports(aggregated public sources), TA Securities Holdings Berhad

TA Securities Holdings Bhd

External broker reports(aggregated public sources)

Equity Bottom-Up

Malaysia Airports Holdings / Equity Bottom-Up

<div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<p><a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a> is Australia’s largest airport and the only listed airport on ASX. Sydney Airport has rejected a revised conditional, non-binding indicative offer of A$8.45 per share from a consortium (Sydney Aviation Alliance). The revised indicative offer of A$8.45 per share is a 45% premium to the unaffected price of A$5.81 (2 July). The revised indicative offer is also a marginal 2.4% bump to the original offer of A$8.25 per share received from the consortium on 5 July. </p><p>The Board rejected the revised offer as it continues to undervalue Sydney Airport and is opportunistic considering the COVID-19 pandemic. The Board argues that Sydney Airport has a 74-year lease on one of Australia’s most important valuable pieces of infrastructure. </p><p>Pushing for a better price is part of the M&amp;A game. The consortium responded to the Board’s rejection by warning that they are prepared to walk away but at the same time failing to declare that the A$8.45 per share revised offer was its final offer. The Board is open to engaging with the consortium if they lift the offer and is said to be seeking a price around A$9.00 per share, according to press reports. </p><p>The issue is complicated by the different methodologies used by the Board and the consortium to determine the rights adjusted share price to account for the dilutive raise in August 2020. The Board also argues that any proposal should be benchmarked against the pre-COVID share price high of A$9.20 per share reached on 6 December 2019. We think that the revised indicative offer is in line with the pre-COVID-19 rights adjusted share price high reached in December 2019. </p><p>The Board is facing increasing shareholder pushback to at least engage with the consortium and facilitate due diligence. UniSuper, the largest shareholder, has branded the rejection of the revised offer as “<em>disappointing</em>” and wants the Board to engage with the consortium.</p><div class="content-highlight"><p>Overall, the gamesmanship suggests both sides are now invested in securing a deal and the 6.5% valuation differential (A$9.00 Board’s value vs A$8.45 bid) suggest the two sides are not far apart on price. At the last close price of A$7.70, the shares are trading at a 9.7% gross spread to the revised indicative offer. The interim results will be announced on 20 August before market open.</p></div>

Sydney Airport (SYD AU) is Australia’s largest airport and the only listed airport on ASX. Sydney Airport has rejected a revised conditional, non-binding indicative offer of A$8.45 per share from a consortium (Sydney Aviation Alliance). The revised indicative offer of A$8.45 per share is a 45% premium to the unaffected price of A$5.81 (2 July). The revised indicative offer is also a marginal 2.4% bump to the original offer of A$8.25 per share received from the consortium on 5 July. The Board rejected the revised offer as it continues to undervalue Sydney Airport and is opportunistic considering the COVID-19 pandemic. The Board argues that Sydney Airport has a 74-year lease on one of Australia’s most important valuable pieces of infrastructure. Pushing for a better price is part of the M&amp;A game. The consortium responded to the Board’s rejection by warning that they are prepared to walk away but at the same time failing to declare that the A$8.45 per share revised offer was its final offer. The Board is open to engaging with the consortium if they lift the offer and is said to be seeking a price around A$9.00 per share, according to press reports. The issue is complicated by the different methodologies used by the Board and the consortium to determine the rights adjusted share price to account for the dilutive raise in August 2020. The Board also argues that any proposal should be benchmarked against the pre-COVID share price high of A$9.20 per share reached on 6 December 2019. We think that the revised indicative offer is in line with the pre-COVID-19 rights adjusted share price high reached in December 2019. The Board is facing increasing shareholder pushback to at least engage with the consortium and facilitate due diligence. UniSuper, the largest shareholder, has branded the rejection of the revised offer as “disappointing” and wants the Board to engage with the consortium.Overall, the gamesmanship suggests both sides are now invested in securing a deal and the 6.5% valuation differential (A$9.00 Board’s value vs A$8.45 bid) suggest the two sides are not far apart on price. At the last close price of A$7.70, the shares are trading at a 9.7% gross spread to the revised indicative offer. The interim results will be announced on 20 August before market open.

Sydney Airport's Rejection of a Revised Offer Is Likely Not the Final Act

Share Price Immune to Movement Control Order

Malaysia

Malaysia Airports Holdings Berhad is an investment holding company.  The Company, through its subsidiaries, provides management, maintenance, and operation of designated airports.  Malaysia Airports also operates duty-free and non-duty free stores as well as provides food and beverage outlets at the airports.

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Malaysia Airports Holdings (MAHB MK)

Sydney Airport’s Further Revised Offer Gets the Board’s Approval

Sydney Airport has granted DD to a Sydney Aviation Alliance based on a revised price of A$8.75. The offer is attractive and at the last price of...

Arun George

2Q21 Results as Weak as Expected

Buy Malaysia Airports Holdings Berhad: 2Q21 Results as Weak as Expected. - By: TA Securities Holdings Bhd

TA Securities Holdings Bhd

Sydney Airport's Rejection of a Revised Offer Is Likely Not the Final Act

The Board rejects a revised offer of A$8.45, a 2.4% bump to the previous offer. At the last close price of A$7.70, the shares are trading at a...

Arun George

ISG Has Fully Recovered

Buy Malaysia Airports Holdings Berhad: ISG Has Fully Recovered. - By: TA Securities Holdings Bhd

TA Securities Holdings Bhd

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Sydney Airport’s Further Revised Offer Gets the Board’s Approval

Sydney Airport has granted DD to a Sydney Aviation Alliance based on a revised price of A$8.75. The offer is attractive and at the last price of...

Arun George

2Q21 Results as Weak as Expected

Buy Malaysia Airports Holdings Berhad: 2Q21 Results as Weak as Expected. - By: TA Securities Holdings Bhd

TA Securities Holdings Bhd

Sydney Airport's Rejection of a Revised Offer Is Likely Not the Final Act

The Board rejects a revised offer of A$8.45, a 2.4% bump to the previous offer. At the last close price of A$7.70, the shares are trading at a...

Arun George

ISG Has Fully Recovered

Buy Malaysia Airports Holdings Berhad: ISG Has Fully Recovered. - By: TA Securities Holdings Bhd

TA Securities Holdings Bhd

Share Price Immune to Movement Control Order

Buy Malaysia Airports Holdings Berhad: Share Price Immune to Movement Control Order. - By: TA Securities Holdings Bhd

TA Securities Holdings Bhd