LOGIN JOIN SHARECAFE SIGN UP FOR OUR NEWSLETTER ADVERTISE
share cafe logo  
 
SHARECAFE COMMENTARY

Santos Rejects Non-Binding Takeover Approach
BY GLENN DYER - 17/11/2017 | VIEW MORE ARTICLES BY GLENN DYER

Get More Commentary, Discussion & Market Information On -

STO - SANTOS LIMITED


Shares in oil and gas group, Santos were nicely goosed by media reports about a possible $11 billion bid for the company.

The bid turned out to be one of these non-binding, non-indicative proposals which don’t commit either part and are a way of seeing if there is any interest.

The Australian Financial Review reported that a group of US investors had lobbed a proposal at Santos pitched at around $5.30 a share, or $11 billion.

Up went the shares rising 13% to a high of $4.95 where they ended.

The media report forced Santos to release a statement in which it confirmed it rejected a confidential, non-binding proposal from a company called Harbour Energy in August, and said it was not currently in takeover talks with the US investment company.

Santos said it had received a "confidential, non-binding conditional and indicative" proposal from Harbour on August 14 at $4.55 a share.

"The board rejected the approach on the basis that the indicative price was inadequate and the sources of funds were uncertain," it said in a statement to the ASX on Thursday.

Santos said it was "not currently engaged in discussions with, and has not received a current proposal from Harbour Energy regarding a change of control transaction".

According to the AFR, Linda Cook, a former executive director of Royal Dutch Shell, approached Santos' board in the September quarter with an invitation to support a scheme takeover, which the board rejected.

The consortium was expected to be ready to represent a proposal to Santos “within weeks" at the higher price.

A Harbour Energy spokesman said the company did not comment on market rumours or speculation.

Earlier this month, Santos released its 2018 strategy, predicting a significant fall in sales volume for next year.

The company has kept to previously stated 2017 forecasts, expecting production levels to hit the upper end of 58 to 60 million barrels of oil equivalent (mmboe) and sales of 79 to 82 mmboe.

Chief financial officer Anthony Neilsen forecast production to remain steady for the next decade at between 55 and 60 mmboe.

However, sales volumes are expected to fall next year to between 72 and 78 mmboe, "primarily due to lower forecast third-party gas sales volumes and lower non-core asset volumes".



View More Articles By Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.



 

RECENTLY ADDED TO SHARECAFE


 › Marcus Today End Of Day Report
 › Tuesday At The Close
 › Brokers Keen On Cleanaway-Tox
 › Cleaner Focus For Gale Pacific
 › Review Of 2017, Outlook For 2018 - Still In The 'Sweet Spot', But Expect More Volatility Ahead
 › Market At Midday On Tuesday
 › Six Reasons To Be Wary Right Now
 › Why A Rise In Rates Won't Mean Much
 › The Quest For Trading Truth
 › How Skyscrapers Predict Market Crashes?
 › Overnight: Crypto Crazy
 › MIN - Morgan Stanley rates the stock as Overweight
 › RAN - Morgans rates the stock as Hold
 › AGL - UBS rates the stock as Buy
More ShareCafe   

GET THE SHARECAFE BREAKFAST BRIEFING


Delivered free to your inbox before the market opens each trading day. Sign up below +

SHARECAFE VIDEO


View More Videos