Abu Dhabi oil giant makes $30bn bid for Santos
A UAE-led consortium of investors has made a nearly $30bn bid to take over Australian-listed oil and gas producer Santos.
The offer is for the acquisition of all ordinary shares on issue in Santos for $8.89 per share.
This means shareholders in the company will get a 28 per cent premium on their stocks since last Friday's closing price of $6.96.
The non-binding indicative proposal has been insured by a consortium led by XRG PJSC, a subsidiary of Abu Dhabi National Oil Company, as well as Abu Dhabi Development Holding Company and US private equity group Carlyle.
The move follows two previous confidential cash offers made by the XRG- consortium on March 21 for $8 per share.
The deal still remains subject to conditions, including regulatory approvals from authorities in Australia, the US, and Papua New Guinea.
Santos also warned that there was no certainty the proposal would result in a transaction.
As a result, Santos said shareholders did not need to take any action in relation to the indicative proposal at this stage.
'Santos notes that there is no certainty that the XRG consortium will enter into a binding SIA or that a potential transaction will proceed,' the company said in a statement.
'Santos will continue to keep its shareholders informed in accordance with its continuous disclosure obligations.'
The board thinks it's in the best interest of shareholders to provide the XRG consortium with access to confidential information to start the due diligence process.
If terms are reached, the board intends to unanimously recommend shareholders agree on the deal. This is in the absence of a superior proposal and subject to the independent expert's report.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Sydney Morning Herald
an hour ago
- Sydney Morning Herald
Donald Trump-induced market chaos won't shred your super balance
First, it's a question of sheer size. The US is simply too big to ignore, and our funds are too big to stay in Australia. The US makes up more than half the world's equity markets by value, so other markets would simply be unable to absorb all the capital if people wanted to move. Australian super funds are also bursting with cash they need to deploy thanks to compulsory super contributions, and they already own more than a quarter of the local sharemarket. But size isn't the only reason the US will probably remain a magnet for super funds. 'The US do probably a better job of turning GDP growth into earnings per share growth, which ultimately is what our members invest in, than most countries around the world.' Cbus chief investment officer Leigh Gavin Another drawcard for big super is US leadership on technology and innovation, including in artificial intelligence, notwithstanding growing competition from China. This is reflected in the eye-popping share prices of the 'magnificent seven' – the giant US tech stocks that have posted huge returns in recent years, even including a more bumpy ride lately. Cbus chief investment officer Leigh Gavin says that even though the US outlook over the next decade is riskier than it was a year ago, he still views the US as 'an amazingly dynamic country with amazingly dynamic and innovative companies'. 'The US do probably a better job of turning GDP growth into earnings per share growth, which ultimately is what our members invest in, than most countries around the world,' Gavin says. This doesn't mean the US will remain quite as dominant in the investment world as it has been. Indeed, there are signs that big investors are keen to spread their bets more widely, including into other regions such as Europe, and other currencies outside the greenback. But throughout the past six months of volatility, there have been few signs super funds are ditching the US in any dramatic way. MLC Asset Management chief investment officer Dan Farmer for example says the fund has been diversifying into Europe because it believes the continent represents better value, but not because the fund believes US exceptionalism is over. 'We spent a bit of time thinking about that question of US exceptionalism because it is a large part of our portfolio and most portfolios,' Farmer says. 'And we've arrived at the conclusion that the US is still an exceptional market for a few reasons – the quality of the businesses in the US. The tech stocks are expensive, yes, but still high-quality businesses.' Loading One thing, Farmer says, that would make the fund really take notice would be a weakening in US institutions such as the Federal Reserve. But although Trump has repeatedly taken potshots at the central bank, Farmer believes its independence is 'still very much intact'. What about geopolitical risk? Are the super giants worried that the many flashpoints in the world – the latest being the Middle East – will have disastrous consequences for markets? Again, big funds are betting that over the long term, geopolitical crises are unlikely to cause lasting damage to markets, unless they inflict a major hit on the world economy. The muted reaction on global markets to the US bombing of Iran is a case in point. Gavin says geopolitical shocks in the past have typically knocked 2 to 10 per cent off share markets (unless they spark a recession). In many cases, markets rebound soon after the initial shock. All of this underlines perhaps the most important lesson from a wild year on markets: staying the course has paid off. Every time there is a market plunge, super funds brace for jittery members to move their money to a safer option such as cash. Given the frequency of scary headlines, it's easy to see why many people get spooked. But the well-known risk of doing this is that you could lock in losses, and miss out on the rebound – which this year was powerful, and took place when Trump paused his tariff plan. With the benefit of hindsight, we now know switching to cash during the 'Liberation Day' chaos would have been a costly mistake. As Trump is still early in his second term, that's worth remembering because it's highly likely his presidency will bring more episodes of volatility for investors. Ross Gittins is on leave.
The Age
6 hours ago
- The Age
Australian exports to tumble $30b as Trump's tariff war hits home
Australia is headed for a $27 billion collapse in income from two of its biggest exports – liquefied gas and iron ore – as Donald Trump's trade war with China deepens fears for the global economy and stifles demand for commodities. The outlook for some of Australia's largest mining and energy companies has deteriorated since April, when the United States imposed across-the-board tariffs at much higher rates than many had been expecting, leading to increased uncertainty and lower global growth forecasts. While Trump gave Australia the minimum baseline tariff rate of 10 per cent, the fallout for the country is expected to be wider-reaching as the biggest Asian buyers of Australia's natural resources, particularly China, face much higher US tariffs amid an already sluggish time for their economies. 'Rising trade barriers – and uncertainty over how high these barriers will settle – have disrupted trade between the US and its major partners and caused businesses and consumers to adopt a 'wait-and-see' approach,' the Department of Industry, Science and Resources says in its latest export forecast report, to be released on Monday. 'The associated uncertainty is likely to impinge on world commodity demand, as the nations that Australia supplies are impacted.' Australia is the world's largest exporter of iron ore – the raw ingredient that is turned into steel in giant blast furnaces – and one of the top shippers of liquefied natural gas to countries in Asia that need the fuel to keep the lights on and to power their factories. However, as prices continue easing, the revenue earned from those commodities is now projected to decline more sharply than the government had been expecting just three months ago: iron ore earnings are set to fall by $20 billion – from $116 billion to $96 billion – within two years, while LNG is on track to fall from $60 billion to $53 billion. 'The near-term outlook for Australian resources and energy exports has softened as rising trade barriers hurt the world economy,' the department says in the report.
Sydney Morning Herald
6 hours ago
- Sydney Morning Herald
Australian exports to tumble $30b as Trump's tariff war hits home
Australia is headed for a $27 billion collapse in income from two of its biggest exports – liquefied gas and iron ore – as Donald Trump's trade war with China deepens fears for the global economy and stifles demand for commodities. The outlook for some of Australia's largest mining and energy companies has deteriorated since April, when the United States imposed across-the-board tariffs at much higher rates than many had been expecting, leading to increased uncertainty and lower global growth forecasts. While Trump gave Australia the minimum baseline tariff rate of 10 per cent, the fallout for the country is expected to be wider-reaching as the biggest Asian buyers of Australia's natural resources, particularly China, face much higher US tariffs amid an already sluggish time for their economies. 'Rising trade barriers – and uncertainty over how high these barriers will settle – have disrupted trade between the US and its major partners and caused businesses and consumers to adopt a 'wait-and-see' approach,' the Department of Industry, Science and Resources says in its latest export forecast report, to be released on Monday. 'The associated uncertainty is likely to impinge on world commodity demand, as the nations that Australia supplies are impacted.' Australia is the world's largest exporter of iron ore – the raw ingredient that is turned into steel in giant blast furnaces – and one of the top shippers of liquefied natural gas to countries in Asia that need the fuel to keep the lights on and to power their factories. However, as prices continue easing, the revenue earned from those commodities is now projected to decline more sharply than the government had been expecting just three months ago: iron ore earnings are set to fall by $20 billion – from $116 billion to $96 billion – within two years, while LNG is on track to fall from $60 billion to $53 billion. 'The near-term outlook for Australian resources and energy exports has softened as rising trade barriers hurt the world economy,' the department says in the report.
