Abu Dhabi National Oil makes $28.9b play for Australia's Santos
Abu Dhabi National Oil is making a play for Australian energy major Santos, with an all-cash offer that values the company at $US18.7 billion ($28.9b)
Santos on Monday said Adnoc had offered it $US5.76 ($8.89) a share — a 28 per cent premium to the closing price on Friday — and the board has backed the deal over the weekend.
Santos' stock has risen in recent months on speculation that Middle Eastern energy producers including Adnoc and Saudi Aramco were circling the Adelaide-based company.
Santos has long been a target for rivals.
In 2018, it rejected multiple offers from US-based Harbour Energy while talks with Perth-based Woodside Energy broke down last year.
Some investors have urged the company to split its coveted LNG assets from oil operations in Alaska and its domestic gas business in Australia to cash in on higher valuations.
Santos said the indicative proposal would be the 'final non-binding indicative offer'.
It also revealed the bid had come after two confidential, non-binding and indicative proposals from Adnoc's foreign investment unit XRG — one on March 21 priced at $US5.04 ($8) and on March 28 at $US5.42 ($8.60).
Any deal would be subject to approval from the Foreign Investment Review Board and a host of regulators in the US and Papua New Guinea.
'The Santos board confirms that, subject to reaching agreement on acceptable terms of a binding scheme implementation agreement, it intends to unanimously recommend that Santos shareholders vote in favour of the potential transaction, in the absence of a superior proposal and subject to an independent expert concluding, and continuing to conclude, that the potential transaction is fair and reasonable and in the best interests of Santos shareholders,' it said.
Goldman Sachs and JB North & Co are acting as financial advisers to Santos. Rothschild & Co is acting as independent board adviser. Herbert Smith Freehills Kramer is acting as legal adviser to Santos.
More to come.
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