Australian oil and gas giant Santos has agreed for a second time to extend the exclusive due diligence window for Middle Eastern energy behemoth ADNOC in a major development to the closely watched takeover saga.
Santos announced the second extension on Monday morning, notifying investors it would now give the Abu Dhabi National Oil Company until September 19 to formalise its offer.
“On August 24, the XRG consortium again confirmed it has not found anything in due diligence that would lead it to withdraw its indicative proposal,” the company said.
“The consortium has requested an extension of the exclusivity period to conclude due diligence and to allow the consortium to obtain all necessary approvals to enter into a binding transaction.”
On August 11, Santos announced it would extend the process to August 22.
ADNOC lobbed a $30bn takeover bid for Santos in June and Santos agreed to the company’s “indicative proposal” or initial offer.
Under the deal, XRG, an ADNOC subsidiary, would acquire all of Santos’ shares for a cash price of $8.89, which represents a 28 per cent premium on the $6.96 closing price of the company’s stock before the announcement.
The due diligence period gives XRG exclusive access to Santos’ confidential information as it prepares for a final decision.
But Santos, a $25bn company, is a jewel in Australia’s corporate crown and a major domestic energy producer.
The prospect of foreign control of parts of the country’s energy system has triggered caution from policymakers.
Duncan Evans, NewsWire