Australian Stock Markets
Australian gas producer Santos Ltd (STO.AX) said on Thursday it rejected a A$9.5 billion (5.48 billion pounds) takeover approach in August, sending its shares up 13 percent on speculation another offer was likely to emerge.
Santos, Australia’s no.2 independent oil and gas company, said it rebuffed the approach from private equity-backed Harbour Energy as too cheap and has not received any further proposal.
It confirmed the August approach after a newspaper reported that Harbour, led by a former executive director of Royal Dutch Shell Plc (RDSa.L), Linda Cook, was set to make a bid worth around A$11 billion.
The Australian Financial Review on Thursday reported that Harbour was lining up a bid of around A$5.30 a share, well above analysts’ average price target of A$4.26, according to Thomson Reuters data.
The interest in Santos comes at a time when gas demand is expected to soar in China, and a global LNG glut is expected to turn to a shortfall within five years as few new LNG projects are set to open after 2020.
Santos shares rose to a 15-month high of A$4.95.
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 nearly A$9 billion in debt.
It has since slashed debt and cut costs, positioning itself to benefit from rising oil and gas prices at its Gladstone liquefied natural gas (LNG) project, and gas assets in Papua New Guinea, Australia’s Cooper Basin and offshore northern Australia.
Santos expects to hold its gas output steady over the next several years, with growth to kick off in 2023 from projects in northern Australia and Papua New Guinea.
Harbour Energy was formed in 2014 by private equity firm EIG Global Energy Partners to make investments outside the United States.
Earlier this year Harbour bought Shell’s UK North Sea assets with Chrysaor Holdings Ltd for $3 billion, making it the largest independent oil and gas producer in the North Sea.
Its backer EIG has already invested in Australia, funding Senex Energy (SXY.AX) on a coal seam gas project and taking a 12 percent stake in the junior producer in a market that faces a gas supply crunch and soaring prices.
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.
Santos, Australia’s no.2 independent oil and gas company, said it rebuffed the approach from private equity-backed Harbour Energy as too cheap and has not received any further proposal.
It confirmed the August approach after a newspaper reported that Harbour, led by a former executive director of Royal Dutch Shell Plc (RDSa.L), Linda Cook, was set to make a bid worth around A$11 billion.
The Australian Financial Review on Thursday reported that Harbour was lining up a bid of around A$5.30 a share, well above analysts’ average price target of A$4.26, according to Thomson Reuters data.
The interest in Santos comes at a time when gas demand is expected to soar in China, and a global LNG glut is expected to turn to a shortfall within five years as few new LNG projects are set to open after 2020.
Santos shares rose to a 15-month high of A$4.95.
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 nearly A$9 billion in debt.
It has since slashed debt and cut costs, positioning itself to benefit from rising oil and gas prices at its Gladstone liquefied natural gas (LNG) project, and gas assets in Papua New Guinea, Australia’s Cooper Basin and offshore northern Australia.
Santos expects to hold its gas output steady over the next several years, with growth to kick off in 2023 from projects in northern Australia and Papua New Guinea.
Harbour Energy was formed in 2014 by private equity firm EIG Global Energy Partners to make investments outside the United States.
Earlier this year Harbour bought Shell’s UK North Sea assets with Chrysaor Holdings Ltd for $3 billion, making it the largest independent oil and gas producer in the North Sea.
Its backer EIG has already invested in Australia, funding Senex Energy (SXY.AX) on a coal seam gas project and taking a 12 percent stake in the junior producer in a market that faces a gas supply crunch and soaring prices.
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.
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