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A consortium led by Abu Dhabi’s nationwide oil firm has made a $19bn bid to take over one in all Australia’s largest vitality teams.
Santos mentioned XRG, an funding arm of the Abu Dhabi Nationwide Oil Firm, had made an indicative money provide of $5.76 a share, valuing the Adelaide-based firm at $18.7bn. It represents a 28 per cent premium to Santos’s closing share worth final week.
Abu Dhabi Developmental Holding Firm and US personal fairness fund Carlyle are additionally within the bidding group.
If the deal closes, it could be the most important takeover of an Australian firm, in line with knowledge compiled by Dealogic primarily based on the money paid and whole deal dimension of $22bn together with debt.
That worth would surpass the sale of Sydney Airport to infrastructure traders, Blackstone’s acquisition of AirTrunk and the merger of Woodside and BHP’s oil and gasoline operations.
Santos mentioned its board would suggest the provide, topic to phrases being agreed, and that it had rebuffed two decrease bids from the XRG-led group in late March.
Santos’s shares opened 11 per cent increased in Australia on Monday.
The bid for the pure gasoline developer comes throughout a interval of volatility within the vitality markets as battle escalates between Israel and Iran.
Santos has been linked with a sale, break-up or asset selldown for 2 years and held talks with Australian rival Woodside over a merger final 12 months with out placing a deal.
Adnoc has been linked with a takeover up to now because of the Australian firm’s growth pipeline in pure gasoline and its provide preparations into Asia.
Adam Martin, an analyst at E&P, mentioned a rising give attention to the worth of liquefied pure gasoline belongings had put Santos again into play.
“Now does really feel like an opportune time to accumulate Santos with dangers constructing on vitality costs and Santos coming into a free money inflection part with the completion of a number of main development tasks,” he mentioned.
Australia and the United Arab Emirates signed a free commerce settlement final 12 months as a part of a better alliance between the 2 international locations on agriculture. Analysts at Citi mentioned Australia’s International Funding Overview Board may nonetheless be a “important hurdle” for XRG, on condition that Santos is a key provider to Australia’s home gasoline market.
Jim Chalmers, Australia’s treasurer, who may have the ultimate say over the deal, mentioned on Monday in an interview with broadcaster ABC that ruling on whether or not Santos could possibly be acquired was a “large choice” for the nation however that he wouldn’t pre-empt the evaluation board’s ruling.
XRG was created by Adnoc to put money into international vitality belongings, with a selected give attention to pure gasoline, chemical and low-carbon applied sciences.
Santos suits that technique given its growth of gasfields and carbon seize and storage belongings together with the Moomba subject in distant South Australia.
In December Sultan Al Jaber, Adnoc’s chief government, mentioned XRG would have an enterprise worth of “over $80bn” and needed to double the worth of its belongings over the following decade.
Bernard Looney, the previous head of oil main BP, is a member of the XRG board.
Extra reporting by Arjun Neil Alim in Hong Kong
