July 12, 2021
Writing for The Australian Financial Review, Tribeca’s Jun Bei Liu comments on the wave of M&A activity, which she believes is encouragement to investors to be agile and find unloved businesses with enduring business models, household brands and irreplaceable assets.
One of the most frequently discussed topics in the sharemarket in recent months has certainly been the debate over possible future private equity targets.
News of private equity snapping up a strategic equity stake or a company receiving bids seem commonplace. The most recent and significant is of course the $22 billion bid from IFM consortium for the Sydney Airport at a 42 per cent premium to the share price.
While many in the industry claim they were blind-sided by the bid, we beg to differ. This should come as no surprise; Sydney Airport is a highly strategic and monopolistic asset with long term leases in place. It is the only listed airport in Australia and is one of the very few in the world, not to mention it is also one of the most profitable and well-run airports by far.