SYDNEY June 16 — Abu Dhabi’s state-owned oil company is leading a takeover bid for Australian energy group Santos, valuing it at US$18.7 billion, Santos said Monday.
Santos’s board said it plans to unanimously recommend the Abu Dhabi National Oil Company’s offer to shareholders if it can agree on the takeover terms.
Adelaide-based Santos has energy operations in Australia, Papua New Guinea, East Timor and the United States, and is a major supplier of liquefied natural gas in Australia and Asia.
The Abu Dhabi National Oil Company’s all-cash takeover offer amounts to US$5.76 for each Santos share, equivalent to US$18.72 billion for the entire company.
The price per share is 28 per cent higher than Santos’ closing level on Friday.
Its stock surged more than 15 per cent at one point in early trade on the Australian Securities Exchange.
The Australian firm said its board “intends to unanimously recommend that Santos shareholders vote in favour of the transaction” if it can agree on terms and there is no better offer.
The Abu Dhabi state-owned energy firm made its bid via a consortium led by its own subsidiary, XRG.
Other members of the consortium include Abu Dhabi Development Holding Company and global investment firm Carlyle.
Last year, Santos and rival Australian energy firm Woodside Energy abandoned talks to create one of the world’s largest natural gas exporters.
Santos has been a rumoured takeover target for more than two years, said a report by E&P Financial Group.
The timing now felt “opportune” for a takeover offer, it said, with the risks weighing in favour of higher energy prices and Santos having completed some major investment projects.
E&P Financial said it expected the Santos bid to intensify focus on the value of liquefied natural gas assets, citing media reports that the Abu Dhabi National Oil Company was also interested in BP’s LNG and gas operations.
Santos said the “indicative proposal” by its Abu Dhabi suitor was subject to due diligence, agreement on terms, and approval by regulatory authorities in Australia, Papua New Guinea and the United States. — AFP
