Santos opens its books to suitor
The consortium looking to buy South Australian oil and gas giant Santos has been given an exclusive look inside the business’ books as the $30 billion deal progresses.
Santos announced on Friday that the XRG Consortium – a combination of a subsidiary of Abu Dhabi National Oil Company and private equity behemoth Carlyle – has been granted exclusive due diligence access for a period of six weeks.
The due diligence follows the signing of a process and exclusivity deed with XRG Consortium as part of a takeover bid that values Santos shares at US$5.67 (AU$8.89), or approximately $30 billion.
The process deed governs the basis upon which the consortium will have the opportunity to undertake due diligence and provides for the parties to negotiate in good faith a binding scheme implementation deed to implement the potential transaction.
The exclusivity provisions include customary “no shop”, “no talk”, “no due diligence” and “notification” obligations.
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“A fiduciary exception applies enabling the Santos Board to deal with potentially superior proposals from competing acquirers from the date that is four weeks from today,” Santos said.
Abu Dhabi National Oil has expressed interest in acquiring Santos since July 2024, after negotiations of a potential merger between Santos and local competitor Woodside wound up in February 2024.
Santos shareholders will not be required to respond to the proposal, and there is no guarantee that XRG Consortium will enter into a binding agreement.
At Santos’ annual general meeting last month, chief executive Kevin Gallagher poured water on rumours he was heading for the exit, as he talked up the organisation’s performance despite its sliding share price after a year of downtrending oil prices.
