Santos shares surge over 15% after $18.7 billion takeover bid
ADELAIDE: Santos Limited (ASX: STO), a leading Australian energy company, announced Monday it received a non-binding takeover proposal from a consortium led by Abu Dhabi’s XRG P.J.S.C., a subsidiary of the Abu Dhabi National Oil Company (ADNOC). The bid, valued at US$5.76 (A$8.89) per share, represents a 28% premium to Santos’ last closing price and could value the deal at approximately $14.5 billion (USD) if finalized.
Key Details of the Proposal
The XRG Consortium, which includes Abu Dhabi Development Holding Company (ADQ) and U.S. investment firm Carlyle, submitted the offer on June 13, marking its third approach since March. Previous bids included:
- March 21, 2025: US$5.04 (A$8.00) per share
- March 28, 2025: US$5.42 (A$8.60) per share
The latest offer represents significant premiums to Santos’ recent trading prices:
- 30% above the 1-week average (A$6.82)
- 44% above the 3-month average (A$6.19)
Conditions and Next Steps
The proposal is contingent on:
- Due diligence by the XRG Consortium.
- Negotiation of a Scheme Implementation Agreement (SIA).
- Regulatory approvals, including from Australia’s Foreign Investment Review Board (FIRB), the U.S. Committee on Foreign Investment, and authorities in Papua New Guinea, where Santos holds assets.
Santos’ board has agreed to grant exclusive due diligence access, pending a finalized Process and Exclusivity Deed. The board signaled it would unanimously recommend the deal to shareholders unless a superior offer emerges.
The bid underscores Abu Dhabi’s growing influence in global energy markets, following recent acquisitions in Europe and Asia. For Santos, the offer comes amid heightened consolidation in the oil and gas sector, with rivals like Woodside Energy also exploring deals.
Santos is advised by Goldman Sachs, JB North & Co, and Rothschild & Co, with Herbert Smith Freehills Kramer providing legal counsel. The company emphasized no immediate action is required from shareholders and cautioned that the deal may not proceed.