Sydney Airport Holdings said Thursday (July 15) that it would reject a $16.6 billion takeover bid from a group of infrastructure funds.
The operator of Australia's largest airport said directors believed the proposal undervalued the airport and was not in the best interest of shareholders.
A buyout would have been the latest in a frenzy of Australian deals being driven by record-low interest rates.
Last week, the Sydney Aviation Alliance offered A$8.25 a share for the airport.
In a statement, the Alliance said it was "surprised and disappointed" by the rejection, but did not say if it had ruled out a higher offer.
Shares of the airport stayed flat Thursday - a sign the market expects further talks on a potential deal.
Media reports have also linked other groups, including Australian investment bank Macquarie, to a potential rival bid.
If the deal had gone ahead it would have been one of Australia's biggest buyouts.
Sydney Airport, like most global travel hubs, has been hit hard by the global health crisis.
It is Australia's only listed airport operator and a purchase would be a long-term bet on the travel sector.