Australian oil and gas firm Santos has received a $18.7bn bid from a consortium, led by XRG, a subsidiary of Abu Dhabi National Oil Company (ADNOC).
The consortium also includes Abu Dhabi Development (ADQ) and Carlyle.
This non-binding indicative offer suggests the acquisition of all ordinary shares in Santos at a cash price of $5.76 (A$8.89) per share via a scheme of arrangement. It follows previous offers made by the consortium earlier in March.
The latest proposal requires the XRG consortium to complete confirmatory due diligence and negotiate an agreed scheme implementation agreement with Santos.
XRG stated: “The XRG-led consortium aims to build on Santos’ strong and longstanding legacy as a trusted and reliable energy producer, unlocking additional gas supply for Santos’ customers, and strengthening domestic and international energy security.
“The proposed transaction is aligned with XRG’s strategy and ambition to build a leading integrated global gas and LNG business.”
At the close of trading on the ASX on 13 June 2025, the offer represented a 28% premium over the last closing price and significant premiums over volume weighted average prices over one week, one month, three months, and six months.
Earlier offers by the XRG consortium included bids of $5.04 (A$8) per share on 21 March 2025 and $5.42 (A$8.6) per share on 28 March 2025, both of which were also non-binding and indicative.
The proposal remains contingent upon various conditions, including satisfactory due diligence completion by the consortium and regulatory approvals from several authorities such as Australia’s Foreign Investment Review Board and Australian Securities and Investments Commission among others.
Santos said that following careful evaluation, its board has resolved to permit the XRG consortium access to confidential information necessary for due diligence, subject to reaching agreement on terms for this access. Additionally, the consortium seeks a process and exclusivity deed before proceeding further.
Should an acceptable binding scheme implementation agreement be reached, Santos’ board intends to recommend that shareholders support the transaction in the absence of a superior proposal. This will also be subject to confirmation by an independent expert that it is fair and reasonable.
Financial advisory services for Santos are being provided by Goldman Sachs and JB North & Co, with Rothschild & Co acting as an independent board adviser. Legal advice is being rendered by Herbert Smith Freehills Kramer.
The XRG consortium has appointed J.P. Morgan as its financial adviser with legal advice from Linklaters and Allens.
