Will it be third time lucky for IFM in its takeover bid for Sydney Airport?

After rejecting two takeover offers in as many months, Sydney Airport (ASX:SYD) has allowed the aspiring consortium to conduct further due diligence.

The Sydney Aviation Alliance, a group led by IFM Investors, have been turned down twice by Sydney Airport’s board which argued the bids undervalued the company.

As Australia’s largest airport, it has suffered throughout the entire pandemic as international travel demand all but dried up.

(International travel numbers in the first 6 months of 2021 fell 91% compared to the prior corresponding period).

While domestic travel demand has seen some periods of travel numbers near pre-pandemic numbers, these have been vulnerable to interstate border closures.

Overall passenger numbers were down 36.4%, with six million people travelling, and the company made an after tax loss of $97.4 million.

But the board argued travel demand would resume and there was a chance to create further value beyond that which would be created by travel resuming.

“Sydney Airport will only progress a change of control transaction on terms that deliver and recognise appropriate long term value for Sydney Airport security holders,” it said.

Third time lucky?

Yet, after standing its ground with bids at $8.25 per share and $8.45 per share, the $8.75 bid from the consortium was enough for Sydney Airport to conduct further due diligence.

The board indicated this would take four weeks, and would enable the consortium to put forward a binding proposal.

And if the takeover bid for Sydney Airport was at $8.75 per share, it might be a case of third time lucky.

“Should the consortium make a binding offer at $8.75 cash per stapled security, the current intention of the boards is to unanimously recommend that security holders vote in favour of the proposal in the absence of a superior proposal,” the board said.

Sydney Airport shares rose by nearly 5% this morning.