Australian Energy Major Santos Receives Takeover Proposal from ADNOC-led Consortium

Australian energy major Santos has received a non-binding takeover proposal from a consortium led by the Abu Dhabi National Oil Company (ADNOC). The takeover offer by a consortium of ADNOC subsidiary XRG, Abu Dhabi Development Holding Company, and Carlyle received early endorsement from the Santos board.

The proposal is for the acquisition of all the ordinary shares on issue in Santos for a cash offer price of A$8.89 ($5.76) per share, representing a 28% premium to the last closing price of A$6.96. This follows two previous confidential proposals from the consortium on March 21 and March 28 for lower prices per share.

At $5.76 a share, the latest offer values Santos at $18.7bn, with a total value including debt at $23.7bn. If the transaction goes through, it will be the largest all-cash takeover in ASX history.

The proposal is subject to the satisfactory completion of confirmatory due diligence by the consortium and the negotiation of an agreed scheme implementation agreement with Santos on customary terms and conditions. If an agreement is reached, the board will recommend that shareholders vote in favour of the offer.

However, the South Australian government has expressed concerns about the potential takeover, with Energy and Mining Minister Tom Koutsantonis stating that he would fight to keep Santos’ headquarters in Adelaide, as it is of “strategic and vital importance to the state.”