Santos: Media lost in translation over ENN – Harbour talks

Australia’s Santos Ltd has said that no agreement has been reached between its shareholder ENN and Harbour Energy over the proposed takeover of the company.

Santos was referring to media writings this week, claiming that Harbour Energy, which last month filed a $10.3 billion takeover bid for Santos, has reached a preliminary agreement with ENN over the proposed takeover.

The Australian gas producer first on Tuesday said it had not received a notification of any agreement between Harbour and ENN or any change in substantial holding in relation to its shares, advising its shareholders not to act in relation to the Harbour proposal.

Then, on Wednesday, Santos said ENN, its Chinese shareholder, has since advised Santos that media reports were not an accurate translation of their announcement and should be interpreted as an intention to engage with Harbour and that no agreement has been reached between Harbour and ENN.

Santos said: “Santos confirms that the Strategic Agreement between Santos, ENN and Hony Capital (Hony) announced to the ASX on 27 June 2017 remains in effect. This requires ENN and Hony to procure the exercise of voting and disposal rights attaching to their Santos shares in accordance with a majority recommendation of the Santos Board in relation to a third-party change of control proposal. Santos continues to advise that its shareholders take no action in relation to the Harbour proposal at this time.”

As previously reported the offer, launched on March 29, is for Harbour to acquire a 100 percent of Santos shares by way of a scheme of arrangement.

The indicative offer price is US$4.98 per share, which in Australian dollars, is equivalent to A$6.50. According to Bloomberg, the offer places Santos value at $10.3 billion.

“The Santos Board considers that, based on the indicative offer price of A$6.50 per share, it is in the interests of shareholders to engage further with Harbour. Accordingly, Harbour has entered into a confidentiality agreement with Santos to allow Harbour the opportunity to undertake confirmatory due diligence,” Santos board said.

Santos had previously dismissed Harbour’s August 2017 A$9.5 billion ($7.2 billion) offer, deeming the indicative price inadequate and the sources of funds uncertain.

Offshore Energy Today Staff