Macquarie Consortium Weighs Rival Bid for Sydney Airport

(Bloomberg) -- A consortium led by Macquarie Group Ltd. is exploring a rival offer for Sydney Airport, in a potential challenge to IFM Investors Pty’s A$22.3 billion ($17 billion) bid, people with knowledge of the matter said.

The Australian firm has been speaking with potential partners, including local pension funds, about making a joint offer, according to the people. The bidding group could include funds managed by Macquarie Infrastructure & Real Assets, the people said, asking not to be identified because the information is private.

Macquarie may also use some of its own capital for the deal and could seek to rope in some of the MIRA funds’ investors to join the consortium, one of the people said. Sydney Airport has risen 19% this year, giving it a market capitalization of about A$20.5 billion.

Any transaction for Sydney Airport, Australia’s main overseas gateway, would be one of the boldest bets yet on a recovery in global travel after the coronavirus pandemic. Including debt, a purchase of Sydney Airport would rank as the largest-ever acquisition in the country and one of the world’s biggest airport deals in recent years, according to data compiled by Bloomberg.

Former Owner

Deliberations are at an early stage, and there’s no certainty Macquarie will proceed with a formal offer, the people said. Macquarie could also seek to join IFM’s consortium, one of the people said. Representatives for Macquarie and Sydney Airport declined to comment.

Sydney Airport said this week it received an offer of A$8.25 per security from an investor group led by infrastructure manager IFM. The proposal represented a 42% premium to Sydney Airport’s last closing price before it was announced. IFM teamed up with QSuper, a pension fund based in the Australian state of Queensland, and Global Infrastructure Partners for the bid.

A Macquarie-backed investor group previously owned the Sydney airport after winning a concession from the government in 2002. The Australian bank later began to sever ties with its listed airport management affiliate, and the company changed its name in 2009. It decided to hand the last of its Sydney Airport stake back to Macquarie shareholders in 2013.

Steady Returns

IFM’s airport assets include Manchester Airports Group and Vienna International Airport, as well as stake in gateways in Melbourne, Perth, Adelaide and Brisbane. GIP has previously invested in Edinburgh Airport, London’s Gatwick Airport and London City Airport.

Alternative asset managers, sovereign wealth investors and pension managers have been flocking to infrastructure deals. They’ve been snapping up everything from toll roads to water utilities as they seek to lock in long-term steady returns in a world of low interest rates.

Earlier this year, U.S. firm EIG Global Energy Partners LLC teamed up with investors including Mubadala Investment Co., China’s Silk Road Fund and Samsung Asset Management to buy a $12 billion stake in Saudi Aramco’s oil pipeline network.

KKR & Co. agreed to buy U.K.-listed infrastructure company John Laing Group Plc for about 2 billion pounds ($2.8 billion) in May. Ontario Teachers’ Pension Plan, one of Canada’s largest public-sector pension managers, is aiming to double infrastructure investments within the next five years.

(Updates with context from fourth paragraph)

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