Santos chair, CEO seek to reassure investors
Chairman Keith Spence and CEO Kevin Gallagher are working to justify the decision to reject Harbour Energy’s $14.5bn offer.
Santos chairman Keith Spence and chief executive Kevin Gallagher are working to justify to investors the board’s decision to reject Harbour Energy’s $14.5 billion offer.
The pair held briefings with Sydney fund managers yesterday after a surprise decision to walk away from the $US5.21 per share offer which translated to $6.95 a share.
Santos shares last night closed at $5.90, after falling from $6.44 where the stock had been trading before the board’s rejection was delivered on Tuesday.
Bankers believed Santos shares could fallen more sharply and back closer towards the $5.07 level where it was before Harbour emerged again in early April.
The Australian revealed this week that Santos is expected to press ahead with a plan to buy Quadrant Energy for up to $3bn.
Mr Spence is reportedly keen to capitalise on the company’s bolstered share price which has risen sharply since Harbour entered the scene.
The Quadrant proposal is reportedly being championed by Mr Gallagher who presented the idea to the Santos board on Tuesday before the Harbour rejection was delivered.
The Santos meetings yesterday were expected to have centred on the company’s growth plans with investors keen for more details on the future strategy after Harbour walked away.
A bid for Quadrant would likely require Santos to undertake a rights issue and take on more debt, which analysts said would be dimly viewed by investors.
Quadrant is owned by Macquarie and Brookfield is made up of assets mainly in the Exmouth and Carnarvon basins and is the largest single contributor to the West Australian gas market.