A consortium of investors from the United Arab Emirates, led by XRG—part of the government-owned Abu Dhabi National Oil Company—has made a significant cash offer of nearly $30 billion to acquire Santos, an Australian oil and gas producer. This proposal, submitted last Friday, includes a cash price of $8.99 per share, which represents a 28 per cent premium over Santos’ recent closing price of $6.96.
The consortium consists of Abu Dhabi Development Holding Company and US private equity firm Carlyle. This bid follows two prior offers in late March—first at $8 and then $8.60 per share. If accepted, the XRG Consortium has committed to maintaining Santos’ headquarters in Adelaide and its operations within Australia.
For the proposal to advance, the consortium will conduct due diligence and enter into a scheme implementation agreement with Santos. The Australian company has agreed to share confidential information to facilitate this process. Should negotiations prove fruitful, Santos’s board has indicated a unanimous intent to recommend the proposal to its shareholders.
Despite this optimistic outlook, the deal is contingent upon various approvals from both domestic and international regulatory bodies, which could complicate the process. The Santos board has noted the absence of competing offers and suggested that they will recommend the deal if deemed fair by an independent expert.
However, it’s important to stress that, as of now, this announcement does not constitute a formal binding offer, and there is no guarantee that an agreement will ultimately materialise. The situation remains fluid, with both the XRG Consortium and Santos acknowledging the uncertainties that lie ahead regarding the potential transaction.