Australian oil and gas giant Santos to accept $30 billion bid from Abu Dhabi and private equity giant

An Abu Dhabi oil company and private equity behemoth Carlyle have made a bid for one of Australia’s biggest oil and gas producers.

Shares in Australian oil and gas giant Santos have rocketed higher after receiving a $30 billion takeover bid from Abu Dhabi National Oil Company and investment giant Carlyle, and the deal has an early blessing from the board.

Santos share shot up roughly 15 per cent in early trade after the deal was announced, but have since settled at a 12.4 per cent premium to Friday’s close, at $7.83.

XRG Consortium, a subsidiary of Abu Dhabi National Oil Company including Abu Dhabi Development Holding Company (ADQ) and Carlyle, made the non-binding proposal to acquire Santos for US$5.76 (A$8.89) per Santos share via an arrangement scheme.

The offer represents a 28 per cent premium to Friday’s $6.96 closing price, winning the early thumbs up from Santos’ board.

“The Santos board confirms that, subject to reaching agreement on acceptable terms of a binding scheme implementation agreement, it intends to unanimously recommend that Santos shareholders vote in favour of the potential transaction,” the board wrote.

The consortium will given access to confidential information to conduct due diligence and negotiate the terms and conditions of any potential agreement, which requires regulatory approvals.

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 XRG Consortium will enter into a binding agreement.

“Santos will continue to keep its shareholders informed in accordance with its continuous disclosure obligations,” the board wrote.

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.

Santos shares are trading at their highest level since July 2024 on the back of Monday’s post-bid rally and a spike in crude prices after attacks between Israel and Iran escalated over the weekend.

Source: AAP