Santos Ltd. has received a non-binding proposal from a consortium of buyers valuing the Australian oil and natural gas producer at $18.78 billion, the company said in a June 15 press release.

The XRG Consortium—led by Abu Dhabi National Oil Co. (ADNOC), which includes subsidiary Abu Dhabi Development Holding Co. and Carlyle—offered Santos $5.76 (AUD$8.89) per share— a 28% premium over the company’s June 13 closing price.  

The offer is the third made by a consortium for Santos but the first made public, the company said. Santos operations include oil, natural gas projects and LNG projects in Australia as well as the Pikka Phase 1 oil project on the North Slope in Alaska.

Santos said it received the offer on June 13 and described the proposal as a “final non-binding indicative offer” that followed two confidential offers in March: the first for $5.04 per share; the second for $8.60 per share.

The most recement proposal represents a:

  • 30% premium to the one-week volume weighted average price (VWAP) of A$6.82[3];
  • 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.

The proposal is subject to the satisfactory completion of due diligence by the XRG Consortium as well as negotiation and execution of an agreed scheme implementation agreement (SIA) with Santos on customary terms and conditions.

Santos said that after consideration of the offer, the company’s board has determined that it is in the best interests of Santos shareholders to provide the XRG Consortium with access to confidential information to conduct confirmatory due diligence and negotiate the terms and conditions of an SIA.

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.

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