QSuper, which is about to merge with Sunsuper, is part of a consortia that has made an $8.75 a security bid for Sydney Airport, valuing the company at $23.6 billion ($32 billion, including debt).
Between them the two super funds have about 2 million members, mostly in Queensland, and when the merger is completed it will be Australia’s second biggest superannuation fund with $200 billion in assets.
The deal is another in the shift in market dynamics which has led to superannuation funds increasingly taking over public companies. The combined value of Australian super funds is almost $3 trillion.
Sydney Airport confirmed this morning that it would allow the consortium, led by IFM to carry out due diligence over a period of four weeks.
That led to a 5 per cent jump in the price of Sydney Airport shares to $8.40 this morning, still well below the indicative offer price.
The airport said that should the consortium make a binding offer at $8.75 per stapled security then and both sides meeting conditions “the current intention of the board is to unanimously recommend that securityholders vote in favour of the proposal in the absence of a superior proposal”.
“The boards note that there is no certainty that the the further revised indicative proposal or the provision of access to the consortium to conduct due diligence, will result in a binding offer for Sydney Airport,” the company said.
The news came as Moody’s Investors said a strong take-up in coronavirus vaccinations should support a sustained recovery in Australian air passenger traffic late this year.
However, Moody’s warned the recovery for airports could be uneven if states adopt different approaches to the vaccine rollout.
The national COVID-19 recovery plan targets vaccination rates of 70 to 80 per cent to start easing restrictions, although there has been some consternation among some states and reservations on whether they will strictly follow the plan.
These targets are expected to be reached in late October and late November this year.
Almost 67 per cent of Australians aged over 16 have had one virus jab, while just under 42 per cent are fully protected with two doses.
Moody’s, the global credit rating agency, said underlying demand, and international experience, suggested a quicker domestic recovery for Australian airports provided consumers had confidence that internal borders would remain open.
“However, airports in states with a relatively slower vaccine rollout and greater inclination to lock down will face a slower pickup in activity,” Moody’s vice president and senior analyst Nicholas Chapman said.
Airports with a greater exposure to international traffic would also lag behind the more domestically oriented airports.
Moody’s noted domestic travel rebounded to over 65 per cent of pre-pandemic levels by the end of April 2021 when state borders were open.
At present, NSW, Victoria and the ACT are in lockdown.
“Australia’s highly urbanised population in a geographically large, island country underpins strong travel demand that will lift airports post COVID-related disruptions,” Chapman said.
“Moreover, the sector’s newfound operational efficiencies, as well as continued solid support from capital markets, will support a recovery.”
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