A consortium including the Abu Dhabi National Oil Company, Abu Dhabi Development Holding Company (ADQ) and private equity group Carlyle has launched an agreed bid for Santos, which values the oil and gas company at US$18.7 billion (A$29 billion).
According to Santos, the non-binding indicative cash offer of US$5.76 (A$8.89) per share from the XRG consortium was via a scheme of arrangement and had the support of the target company’s board, subject to various conditions.
Santos shares (ASX: STO) surged 84 cents or 12.1% to $7.80 on Monday.
The offer was received on 13 June from a consortium led by Abu Dhabi National Oil Company subsidiary XRG P.J.S.C and including ADQ and Carlyle.
At the close of trading on the Australian Securities Exchange (ASX) on 13 June, the proposal represented:
- 28% premium to the last closing price of $6.96
- 30% premium to the one-week volume weighted average price (VWAP) of A$6.82
- 34% premium to the one-month VWAP of A$6.61
- 44% premium to the three-month VWAP of A$6.19, and
- 39% premium to the six-month VWAP of A$6.40.
Santos said the “final non-binding indicative offer” followed two confidential, non-binding and indicative proposals from the consortium on 21 March at US$5.04 (A$8.00) per share and on 28 March 2025 at US$5.42 (A$8.60) per share.
The Santos Board confirmed that, subject to reaching agreement on the acceptable terms of a binding offer, it intended to recommend shareholders vote in favour of the transaction, in the absence of a superior proposal and subject to an independent expert concluding it was fair and reasonable and in shareholders' best interests.
The proposal is subject to the satisfactory completion of confirmatory due diligence by the XRG consortium and the negotiation and execution of an agreed scheme implementation agreement (SIA) with Santos on customary terms and conditions.
The Board also determined that it was in shareholders' best interests to provide the consortium with access to confidential information to conduct confirmatory due diligence and negotiate the terms and conditions of a binding SIA.
Goldman Sachs and JB North & Co are financial advisers to Santos, Rothschild & Co is independent board adviser and Herbert Smith Freehills Kramer is legal adviser to Santos.
