The new offer valued the company 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.
The rejection comes a month after the airport operator turned down an initial bid from the Sydney Aviation Alliance, a consortium of IFM Investors, QSuper and Global Infrastructure Partners.
The board was open to engaging with the Sydney Aviation Alliance if the consortium lifts its indicative price "to appropriately recognise long term value for Sydney Airport securityholders," it said in a statement.
A takeover of Sydney Airport 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 by Square. ($1 = 1.3565 Australian dollars)- Reuters