Categories: World

US firm Harbour Energy makes bid for Australia’s Santos

Santos, a major oil and natural gas firm with interests notably in Papua New Guinea, said it had received a proposal for US$4.98 per share.

This is equivalent to Aus$6.50, representing a 28 percent premium to its closing price before the Easter break.

“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,” the company said in a statement.

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Harbour, which will now carry out due diligence, is planning to fund the deal with US$7.75 billion of underwritten debt.

The move comes five months after Santos knocked back an unsolicited Aus$4.55 per share bid by the US investor, saying it undervalued the company.

While Santos has stakes in oil and gas production in several countries, including Indonesia and Vietnam, its main assets include 13.5 percent of Exxon Mobil’s massive liquefied natural gas venture in Papua New Guinea.

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It also has operations throughout Australia.

Harbour, an energy investment vehicle formed by EIG to acquire high-quality upstream and midstream assets globally, said it had plans to grow Santos by investing further in its existing facilities and adding other assets.

“We are pleased with the decision of the Santos board to engage further and look forward to progressing this transaction towards completion,” said chief executive Linda Cook, a veteran former senior executive of energy giant Royal Dutch Shell.

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By Agence France Presse