Santos (ASX:STO) has announced that it does not anticipate entering into a binding agreement with the XRG Consortium by the end of its exclusivity period on August 22. The consortium, led by XRG PJSC, a subsidiary of Abu Dhabi National Oil Company, and including Abu Dhabi Development Holding Company and Carlyle, had been in pursuit of a full takeover of Santos. Santos is a major Australian oil and gas company. It explores, develops, and produces natural gas and crude oil, supplying energy to homes, businesses, and industries across Asia and Australia.
According to Santos, while due diligence is largely complete, the XRG Consortium advised this week that it still requires final internal approvals. These approvals could take up to four weeks to obtain, even if the terms of a binding scheme implementation agreement (SIA) are agreed upon. The delay raises concerns about the immediate prospects of the takeover.
Santos has cautioned that although discussions with the XRG Consortium are ongoing, there is no certainty that the transaction will proceed. Furthermore, the company noted that there is no guarantee that terms acceptable to Santos will be reached, casting further doubt on the potential deal.
Shareholders and the market will be closely watching for further updates as discussions continue. The lack of a binding agreement by the deadline introduces uncertainty regarding the future direction of Santos and its potential acquisition by the XRG Consortium.
