Harbour Energy lodges binding takeover bid for Santos
Harbour Energy has refused to raise its $13.5bn bid for Santos in the face of rising oil prices, as it submitted a binding offer.
Harbour Energy has refused to raise its $13.5 billion bid for Santos in the face of rising oil prices, delivering the Adelaide icon a firm bid at the $US4.98 price it made an approach at seven weeks ago.
But it has made its bid, lodged after five weeks of due diligence, a little less certain for Santos shareholders, offering no fixed Australian dollar value for the company.
The bid values Santos shares at $6.60 a share.
If completed, it would be one of Australia’s biggest resources sector takeovers.
Santos, whose chairman Keith Spence earlier this month said rising oil prices meant Santos was likely to seek a higher bid, said the board would consider the offer and advised shareholders to take no action.
“The revised Harbour proposal is subject to conditions, including completion of final
confirmatory due diligence and entry into a scheme implementation deed between Santos
and Harbour, which requires the transaction to be recommended by the independent directors of the Santos Board and includes, among other things, FIRB and shareholder approval conditions,” Santos said.
“There is no certainty that the revised Harbour proposal will result in an offer for Santos that
is capable of being considered by shareholders.”
Santos shares yesterday closed at $6.32.
Chinese natural-gas distributor ENN Group and private-equity firm Hony Capital, which have a collective stake in Santos of roughly 15 per cent, would be able to roll their shares into a Harbour investment vehicle and subscribe for new shares, said Santos.
Harbour has plans to use Santos’s core assets to grow in Australia and throughout Asia.
“The independent directors of Santos will consider the revised Harbour proposal and will update shareholders accordingly,” Santos said.
Santos in early April agreed to open its books after Harbour approached it with a fresh $US10.37 billion takeover bid, although analysts had speculated the offer would have to be raised amid rising oil prices.
Santos is one of the largest independent oil and gas producers in the Asia-Pacific region, supplying homes and businesses. It owns vast oil and gas acreage in Australia and is a partner in two liquefied natural gas ventures in Australia and another in Papua New Guinea.
Harbour, set up by EIG Global Energy Partners in 2014 to hunt for oil and gas assets outside the US, last year paid $US3 billion to buy energy assets offshore from the UK from Royal Dutch Shell.
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