Sydney Airport rejects improved $16.8 bln buyout bid, open to higher offer
Sydney Airport Holdings Pty Ltd (SYD.AX) on Monday rejected an improved bid from a group of infrastructure investors worth A$22.80 billion ($16.81 billion), saying that it undervalued the airport operator, but that it was open to a higher offer.
The new offer valued Sydney Airport at A$8.45 per share, 2.4% higher than the previous offer of A$8.25 a share, and a more than 9% premium to the stock’s Friday close.
Shares were steady in morning trading on Monday, with the increased price below market expectations of closer to A$9 a share.
A successful takeover would be among the largest buyouts ever of an Australian firm and underline a year of stellar deal activity, that has already seen a mega $29 billion buyout of Afterpay (APT.AX) by Square (SQ.N).
But it would require Sydney Airport to allow due diligence as well as receiving approvals from shareholders, the competition regulator and the Foreign Investment Review Board, a process that typically takes months.
The unanimous board rejection comes a month after the airport operator turned down an initial bid from the Sydney Aviation Alliance (SAA), a consortium of Australian investors IFM Investors and QSuper and U.S.-based Global Infrastructure Partners.
Record-low interest rates have prompted pension funds and their investment managers to chase higher yields.
Australia’s largest pension fund, AustralianSuper, has joined the consortium, Sydney Airport said, in a move that could make it tougher for a rival offer to emerge given the requirement for 51% Australian control of the airport.
Full coverage: REUTERS
China’s factory output, retail sales slow, miss expectations
China’s factory output and retail sales both rose more slowly than expected in July from a year ago, data showed on Monday, amid signs of increasing pressure on China’s economy as export growth cooled and new COVID-19 outbreaks disrupted business.
Industrial production in the world’s second largest economy increased 6.4% year-on-year in July, against expectations for 7.8% growth and after rising 8.3% in June.
China’s economy has rebounded to its pre-pandemic growth levels, but the expansion appears to be losing steam as businesses have grappled with higher costs and supply bottlenecks while new COVID-19 infections in July prompted some local authorities to lock down and temporarily suspend business operations.
Full Coverage: REUTERS
WORLDWIDE: FINANCE / MARKETS
Asia stocks stumble as China data disappoint
Asian share markets slipped on Monday after a raft of Chinese data showed a surprisingly sharp slowdown in the engine of global growth, just as much of the world races to stem the spread of the Delta variant of COVID-19 with vaccinations.
Figures on July retail sales, industrial production and urban investment all missed forecasts, a trend that is only likely to get worse given the recent tightening in coronavirus restrictions there. L1N2PN03I
“Asia’s low vaccination rates and low tolerance for community spread suggest it is the region most at risk economically from the Delta variant,” said JPMorgan economist Bruce Kasman.
“China is in the midst of removing policy supports, which looks likely to restrain domestic demand growth and weigh on regional performance through the rest of this year,” he added. “With these drags building in recent weeks we have been lowering 2H21 regional growth forecasts.”
There was added uncertainty about the possible geopolitical implications of the sudden collapse of the Afghan government and what it mean for political stability in the region.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) eased 0.2%, nudging back toward the lows for the year touched last month.
Chinese blue chips (.CSI300) were hanging onto gains of 0.3%, perhaps in anticipation of a more aggressive policy easing from Beijing.
Full coverage: REUTERS
Oil falls as Delta surge clouds fuel demand outlook
Oil prices fell more than 1% on Monday, dropping for a third session, as government-imposed restrictions on mobility to counter the spread of the Delta variant raised worries about a recovery in fuel demand.
Brent crude was down 80 cents, or 1.1%, at $69.79 a barrel by 0046 GMT, after edging lower last week.
US oil fell by 81 cents, or 1.2%, to $67.63 a barrel, having risen slightly last week.
“Crude oil remained under pressure as the fast spreading Delta variant of the coronavirus casts a cloud over the outlook for demand,” ANZ Research said in a note.
Official data from China on retail sales, industrial production and urban investment is expected to show that a recent tightening of coronavirus restrictions prompted declines in activity in the world’s second-biggest economy in July.
Dollar languishes near one-week low after consumer sentiment blow
The dollar held near a one-week low versus major peers on Monday, after slumping the most in almost seven weeks on Friday as diving US consumer confidence hurt bets for an early tightening of Federal Reserve policy.
The dollar index , which measures the greenback against six rivals, was little changed at 92.528, maintaining a 0.50% tumble from the end of last week.
It dipped as far as 109.455 yen for the first time since Aug. 5 on Monday, before trading 0.13% weaker at 109.465.
Against the euro , it was mostly flat at $1.17960, close to the one-week low of $1.18045 reached Friday.
A University of Michigan survey released at the end of last week showed consumer sentiment sliding to the lowest level since 2011 amid an acceleration in COVID-19 infections caused by the fast-spreading Delta variant.
U.S. retail sales data due Tuesday will be closely watched for further clues on consumer behavior.
“Does the survey signal an imminent turn in the U.S. economy? We doubt it given vaccine efficacy remains high and the hit to sentiment likely means more people will get vaccinated,” Tapas Strickland, an analyst at National Australia Bank, wrote in a client note. “Instead, the Delta surge in the US is more a case of delay rather than derail as far as the recovery is concerned.”
The dollar has oscillated with the flow of economic data, with momentum from a jobs market recovery pushing it to a four-month peak on Wednesday, only to see it knocked back by cooling inflation pressures.