Darwin LNG terminal; Courtesy of Santos

$19 billion takeover bid takes step forward: Santos and ADNOC-led firm embark on talks

Business & Finance

With a six-week exclusive due diligence period in effect, Australia’s energy player Santos has kicked off negotiations concerning an $18.7 billion non-binding indicative offer for all its shares with a consortium led by XRG, a subsidiary of Abu Dhabi National Oil Company (ADNOC), comprising Abu Dhabi Development Holding Company (ADQ) and global investment firm Carlyle. 

Darwin LNG terminal; Courtesy of Santos

Following XRG’s proposal to buy all ordinary shares issued by Santos for a cash offer price of $5.761 per share via a scheme of arrangement, the Australian player has entered into a process and exclusivity deed with the ADNOC-led consortium.

The process deed is said to govern the basis upon which XRG will have the opportunity to undertake due diligence, enabling the duo to negotiate in good faith, in parallel with the due diligence, a binding scheme implementation deed (SID) to implement the potential takeover.

As a result, the ADNOC-led consortium has been granted exclusive due diligence access for six weeks, with exclusivity provisions, including customary ‘no shop,’ ‘no talk,’ ‘no due diligence’ and ‘notification’ obligations that apply during the exclusivity period.

Santos explains that a fiduciary exception applies, enabling its board to deal with potentially superior proposals from competing acquirers four weeks from June 27. In addition, XRG has agreed to a confidentiality agreement with the Australian firm.

While explaining that its shareholders do not need to take any action regarding this, Santos highlights that there is no certainty XRG will enter into a binding SID or that a potential transaction will proceed.  

This takeover bid is aligned with XRG’s low-carbon agenda and five-year business plan to establish an integrated gas and liquefied natural gas (LNG) business with 20–25 million tons per annum (mtpa) capacity by 2035.

The exclusivity deed comes after the start of commissioning activities for a floating production, storage, and offloading (FPSO) unit, operated by Norway’s BW Offshore, which recently arrived at Santos’ Barossa field offshore Australia.

𝐃𝐨 𝐲𝐨𝐮 𝐰𝐚𝐧𝐭 𝐭𝐨 𝐠𝐫𝐚𝐛 𝐭𝐡𝐞 𝐚𝐭𝐭𝐞𝐧𝐭𝐢𝐨𝐧 𝐨𝐟 𝐲𝐨𝐮𝐫 𝐭𝐚𝐫𝐠𝐞𝐭 𝐚𝐮𝐝𝐢𝐞𝐧𝐜𝐞 𝐢𝐧 𝐨𝐧𝐞 𝐦𝐨𝐯𝐞?

𝐇𝐮𝐫𝐫𝐲 𝐮𝐩 𝐚𝐧𝐝 𝐭𝐚𝐤𝐞 𝐚𝐝𝐯𝐚𝐧𝐭𝐚𝐠𝐞 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐮𝐦𝐦𝐞𝐫 𝐬𝐚𝐥𝐞 𝐝𝐢𝐬𝐜𝐨𝐮𝐧𝐭 𝐨𝐟 𝐮𝐩 𝐭𝐨 𝟓𝟎% 𝐨𝐧 𝐚𝐝𝐯𝐞𝐫𝐭𝐢𝐬𝐢𝐧𝐠 𝐩𝐚𝐜𝐤𝐚𝐠𝐞𝐬!