Macquarie Group Ltd., Australia’s largest investment bank, rose to a three-and-a-half-year high after it proposed to distribute to shareholders its stake in Sydney Airport and said first-half profit climbed 39 percent.
Shareholders will be asked to approve a transaction in which they will receive in February one Sydney Airport security for each Macquarie share they own, while the group would book a A$377 million (A$357 million) gain, the bank based in Australia’s largest city said in a statement today.
The proposal will leave Macquarie without a significant stake in Sydney Airport, Australia’s biggest, for the first time since 2002, when a group led by the bank agreed to buy the state-run facility for A$5.59 billion. Macquarie will have about 1.3 percent stake of the company, down from 16.8 percent now, data compiled by Bloomberg show.
“The proposed Sydney Airport distribution is a substantial and welcome capital management initiative, which should be well received,” Credit Suisse AG analysts led by Sydney-based James Ellis said in a note to investors.
Macquarie shares climbed 4.4 percent to A$53.20 at 12:00 p.m. in Sydney on track for the highest close since Feb. 4, 2010. That extended gains for the year to 50 percent. The benchmark S&P/ASX 200 index was steady. Sydney Airport shares dropped 2.7 percent to A$4.075 giving it a market value of A$8.9 billion.
Macquarie’s profit for the six months ended Sept. 30 rose to A$501 million ($474 million) from A$361 million a year earlier and the bank expects higher profit in the second half, the firm said in a statement today.
The bank’s “strong balance sheet and excess regulatory capital” mean it is a good time for the transaction, Chief Executive Officer Nicholas Moore said in the statement.
The security distribution is “a smart way of paying a special dividend,” said Morningstar Inc. analyst David Ellis.
Macquarie’s move to reduce its stake follows a government plan to set a timeline for construction of a second major airport in the city. Authorities will identify a preferred site by early next year, Deputy Prime Minister Warren Truss told Australian Broadcasting Corp. radio Oct. 11.