Good evening,

Tonight, we present lessons from the latest edition of M&A Monday:

1. There is a truckload of M&A bids out there.
2. There is a truckload of private capital looking for a home.
3. There is a truckload of broken M&A dreams coming.

That’s what we make of a hectic Monday – a day when Sydney Airport revealed a surprising $30 billion bid, which, if completed, would be Australia’s biggest ever M&A deal.

At first glance, it was hard not to like. IFM Investors has plenty of capital – both in terms of funds to spend and political capital to buy sometimes tricky assets – and it was partnered up with its usual rival, Global Infrastructure Partners, which doesn’t miss when it comes to Australian M&A.

There was also a 42 per cent premium, an advisory team spearheaded by one of the country’s top bankers (Christian Johnston, Goldman Sachs) and lawyers (Tony Damian, Herbert Smith Freehills), and an open invitation to the normally pragmatic UniSuper, which owns 15 per cent of Sydney Airport and whose shares are almost looking like a pre-bid stake.

But – as we were reminded at Tabcorp – more of these deals fall over than get completed. Tabcorp, having given some management presentations to potential acquirers Entain and Apollo Global Management, decided it would be better off alone, spurned suitors for its wagering unit and is charging down the demerger path.

So while it’s easy to get caught up in the M&A hype, it’s worth remembering there’s plenty to play out at Sydney Airport before we’re looking at a $30 billion completed deal.

When you look at the top 15 deals in Australia ever — and we have the list tomorrow — three of them are to do with Westfield (which had a strong founder/shareholder pushing the agenda). There are two demergers (Coles and Endeavour Group) and three privatisations (Ausgrid, TransGrid and WestConnex), leaving not a lot of room for run-of-the-mill M&A transactions such as Sydney Airport in the $10 billion-plus club.

But, as we said, IFM is no time waster and has been thinking about this move for a long time.

In Street Talk tomorrow, we look at how IFM plans to address Australia’s airport ownership restrictions in its quest for Sydney Airport, and have spotted Australian PE shop Advent Partners getting back into radiology.

Elsewhere, we found Solly Lew buying Myer shares on Monday afternoon, and Brett Blundy was selling a stake in Aventus via UBS on Monday night.

Happy reading,

Sarah Thompson, Anthony Macdonald and Yolanda Redrup
Street Talk Editors