Santos to engage with Harbour Energy after $10.4 billion takeover offer

Australian oil and gas giant Santos (ASX:STO) has received a US$10.4 billion takeover bid from US energy player Harbour Energy, its fourth unsolicited bid since August 2017.

However, on this occasion Santos has indicated that it will seriously consider the offer, which values the company at close to 30% above its current market capitalisation.

In a statement to the ASX, Santos said: “based on the indicative offer price of AUS$6.50 per share, it is in the interests of shareholders to engage further with Harbour.”

The board went on to advise shareholders to take no further action until it had time to assess the bid. The highly conditional bid is made up of a $6.13 per share cash and a 37 cent per share dividend.

Harbour’s chief executive Linda Cook said the Australian firm’s investments in three major LNG projects (two in Australia and one in Papua New Guinea) were attractive assets that fitted her company’s global vision and strategy.

“We are pleased with the decision of the Santos board to engage further and look forward to progressing this transaction towards completion,” she said.

If Harbour’s bid was to be accepted, it would gain access to a recently revived major with a low cost of oil production and key LNG assets in the Asia-Pacific region.

@RGNonline