Economy

Santos the target of $9.5b United States takeover offer

Santos the target of $9.5b United States takeover offer

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 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 now in takeover talks with the USA investment company.

Harbour Energy's chief executive is Linda Cook, a veteran former senior executive of energy juggernaut Royal Dutch Shell.

However, Santos said in a statement: "In response to media speculation today, Santos confirms that it is not now engaged in discussions with, and has not received a current proposal from, Harbour Energy regarding a change of control transaction for Santos".

"Santos confirms that it is not now engaged in discussions with, and has not received a current proposal from, Harbour Energy", the company said in a statement to the Australian stock exchange.

"We think confirmed reports of a previous indicative bid for Santos from Harbour Energy and a possible higher future bid offer further evidence of rapidly improving sentiment towards the back end of the oil curve and to a recovering LNG market driven by strong Chinese demand", he said.

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

More news: Navios Maritime Holdings Inc. (NM) Analysts See $-0.22 EPS

Santos also rejected a A$7.1 billion proposal in Oct 2015 from a fund backed by the ruling families of Brunei and the United Arab Emirates, at a time when the company was saddled with almost A$9 billion in debt.

In August, the US-based Harbour Energy had offered $4.55 a share to acquire the oil and gas producer Santos.

Earlier this month, Harbour Energy bought oil and gas fields from Shell in the North Sea off the United Kingdom for $US3 billion.

If an A$11 billion for Santos emerges, it will be the biggest USA offer for an Australian company ever and Australia's second-biggest private equity buyout, according to Reuters data.

Harbour Energy, an investment vehicle managed by EIG Global Energy Partners (EIG), earlier announced its strategy to pursue acquisitions of oil and gas assets and strengthen its position in the sector globally.

Santos' biggest shareholder is China's ENN Ecological Holdings Co 600803.SS , which together with private equity partner Hony Capital holds 15.1 percent of the group.

EIG has already invested in Australia, taking a 12 percent stake in junior gas producer Senex Energy SXY.AX .


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