Santos suitors given extra time to finalise $30b deal
An Abu Dhabi consortium has two more weeks to complete due diligence of South Australian oil and gas giant Santos.
Santos has extended its exclusivity period with a consortium so it can complete due diligence and progress to a binding $30 billion transaction.
Announced today, the consortium – led by a subsidiary of Abu Dhabi National Oil Company called XRG P.J.S.C. and including Abu Dhabi Development Holding Company and global investment firm Carlyle – has until 22 August to finalise due diligence and implement an agreement.
Santos said the consortium had “now substantially completed due diligence in relation to the Potential Transaction”.
XRG first lobbed its $30 billion bid in mid-June, which was supported by the Santos board at the time.
Santos is South Australia’s largest company per the South Australian Business Index, with a market capitalisation of $25.7 billion – implying a major premium for shareholders should the deal go through.
“The XRG Consortium has confirmed it has not discovered anything to date that would cause the XRG Consortium to withdraw its Indicative Proposal and has confirmed its commitment to working constructively with Santos to complete the due diligence promptly and agree on a binding transaction,” Santos said.
“To complete due diligence and progress a binding transaction, the XRG Consortium has requested a two-week extension to the Due Diligence and Exclusivity Period under the Process Deed.”
The exclusivity restrictions originally agreed to will continue to apply for the remainder of the period.
Santos’ QLD court win
The company also announced today that the Supreme Court ruled in its favour in proceedings brought by construction manager Fluor Australia.
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The court ruled Fluor must pay $692 million to Santos.
The dispute arose under an engineering and construction contract that Santos entered into in 2011 for the development of production facilities that formed part of its Gladstone gas project.
Construction took place between 2011 and 2014, and Santos argued Fluor was not entitled to all the costs it had claimed and received payment for under the contract.
The final amount ordered in Santos’ favour will be determined in the coming weeks.
