SA minister says Abu Dhabi must seek state approval for Santos takeover
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More news: South Australia's Energy and Mining minister Tom Koutsantonis will engage with Abu Dhabi's state-owned oil company Adnoc to ensure the terms of a proposed takeover of Adelaide-headquartered Santos is "in the best interests of South Australians".
In a statement issued after the takeover proposal was announced, Koutsantonis said "there are levers available to the State Government to ensure that the State has a say in this potential takeover, and our main objective at all times is safeguarding Santos jobs and retaining its headquarters in SA".
"Legislation passed by this Government ensures that Ministerial approval is required for a change in the controlling interest of a licence holder," he said.
"We will be looking at this proposal carefully and engaging constructively with the proponents.”
At 11:28am AEST, Santos shares had risen 12.8% to $7.85. Adnoc is proposing to buy Santos' shares for $8.89 each.
Santos shares rocket on Abu Dhabi-led takeover offer
More news: Santos shares soared in early trading after the oil major received a $30 billion takeover offer from a consortium led by energy investment company XRG, a subsidiary of Abu Dhabi's state-owned oil company Adnoc.
Santos shares were up 14.5% to $7.97 at 10:30am AEST.
Citi analyst Paul McTaggart said the offer price of $8.89 per share compares with Citi's discounted cash value of $7.28 per share and its unrisked value of $9.18 per share.
McTaggart also noted that the deal's approval by the Foreign Investment Review Board may be a "significant hurdle" given Santos' position as a key domestic gas supplier.
Elsewhere, E&P Capital downgraded its rating on Santos from 'positive' to 'neutral' after the announcement, given possible risks to the deal achieving regulatory approvals.
E&P analyst Adam Martin said investors should switch into rival oil producer Woodside Energy, which offers better oil price leverage, as well as other catalysts.
However, he believes the XRG-led consortium has picked an "opportune time" to acquire Santos, with risks building on energy prices and the company entering a free cash inflection phase following the completion of several major growth projects.
Santos confirms $30b takeover bid from Abu Dhabi-led consortium
The news: Oil giant Santos has received a $30 billion takeover offer from a consortium led by energy investment company XRG, a subsidiary of Abu Dhabi's state-owned oil company Adnoc.
The numbers: The XRG-led consortium — which includes Abu Dhabi Development Holding Company (ADQ) and US investment firm Carlyle — has tabled a "final non-binding indicative offer" to acquire 100% of Santos shares for USD5.76, or $8.89 per share.
The offer represents a 28% premium to Santos' last closing price of $6.96.
The move follows a previous confidential proposal made by the XRG-consortium on 21 March of $8 per share, and another offer on 28 March of $8.60 per share.
The context: The indicative proposal remains subject to completion of due diligence by the XRG consortium, as well as customary regulatory approvals.
The Santos board said it intends to unanimously recommend the company's shareholders vote in favour of the takeover.
The XRG-led consortium said it intends to maintain Santos' headquarters in Adelaide, keeping the company's operational footprint in Australia and other international operating hubs.
The source: ASX
