Santos in Negotiations for $18.7 Billion Takeover Offer

Australia’s energy player Santos is currently in discussions with a consortium led by XRG, a subsidiary of Abu Dhabi National Oil Company (ADNOC), regarding an $18.7 billion non-binding indicative offer for all its shares. The consortium also includes Abu Dhabi Development Holding Company (ADQ) and global investment firm Carlyle.

With a proposed cash offer price of $5.761 per share, XRG aims to acquire all ordinary shares issued by Santos through a scheme of arrangement. Santos has entered into a process and exclusivity deed with the ADNOC-led consortium, allowing for a six-week exclusive due diligence period.

The process deed outlines the terms under which XRG will conduct due diligence and negotiate a binding scheme implementation deed (SID) for the potential takeover. Exclusive provisions, including ‘no shop,’ ‘no talk,’ and ‘no due diligence’ obligations, apply during this period.

Santos has the option to consider superior proposals from other potential acquirers after four weeks from June 27, as per a fiduciary exception. XRG has also signed a confidentiality agreement with the Australian firm.

While Santos emphasizes that shareholders do not need to take any immediate action, the company acknowledges that the outcome of these negotiations is uncertain. The proposed takeover aligns with XRG’s low-carbon agenda and business plan to develop a significant gas and LNG business by 2035.

Notably, the exclusivity deed coincides with the commencement of commissioning activities for a floating production, storage, and offloading (FPSO) unit at Santos’ Barossa field offshore Australia, operated by Norway’s BW Offshore.