Press

Santos: Receipt of Unsolicited, Non-Binding, Indicative and Conditional Proposal from Harbour Energy and Granting of Due Diligence


Santos advises that on 29 March 2018 it received an unsolicited, non-binding, indicative and conditional proposal (“Harbour Proposal”) from a special purpose entity of Harbour Energy Ltd (“Harbour”) for it to acquire 100 per cent of Santos shares by way of a scheme of arrangement. 

The indicative offer price is US$4.98 per share, which in Australian dollars, is equivalent to A$6.50[1]per share and represents a premium of:

+    28 per cent to the last closing price of Santos of A$5.07 per share on 29 March 2018; and

+    30 per cent to the one month volume weighted average share price of Santos of A$5.00 per share up to 29 March 2018.

The indicative offer price is comprised of the following components:

+    A cash offer price of US$4.70 per share (equivalent to A$6.131 per share); plus

+    A special dividend of US$0.28 per share (equivalent to A$0.371 per share) which is expected to be fully franked[2].

For those shareholders able to realise the full value of Santos' franking credits, the special dividend would represent additional value over and above the indicative offer price of up to A$0.161 per share.

The Harbour Proposal also provides for a fixed Australian dollar offer price for the first 10,000 shares held by each individual shareholder.

Harbour has indicated this price would be fixed by reference to the prevailing exchange rate at the time binding transaction documentation is entered into.

Harbour has indicated that funding for the transaction is to be provided in the form of US$7.75bn of debt that is to be underwritten by J.P. Morgan and Morgan Stanley (who have each provided commitment letters) and the balance in equity from Harbour, other EIG managed funds and Mercuria Global Energy (who have each provided equity commitment letters for their respective amounts).

The Harbour Proposal follows three prior unsolicited proposals from Harbour, being: (i) 14 August 2017 (indicative offer price: A$4.55 per share); (ii) 22 March 2018 (indicative offer price: A$6.25 per share); and (iii) 27 March 2018 (indicative offer price: A$6.37 per share).

A Santos Board committee comprising the Chairman, the Managing Director and the Chair of each of the Board standing committees has been formed to consider the approach from Harbour and to make recommendations to the Santos Board.

The Santos Board considers that, based on the indicative offer price of A$6.50 per share, it is in the interests of shareholders to engage further with Harbour.

Accordingly, Harbour has entered into a confidentiality agreement with Santos to allow Harbour the opportunity to undertake confirmatory due diligence.

There is no certainty at this time that the Harbour Proposal will result in an offer for Santos that is capable of being considered by shareholders.

Directors therefore advise that Santos shareholders take no action in relation to the Harbour Proposal at this time.

Regardless of the outcome of engagement with Harbour, the Board and management remain focused on continuing to deliver shareholder value through the transformation of Santos into a low cost, reliable and high performance business with strong growth potential.

The Harbour Proposal is subject to a number of conditions, including:

+    A minimum of 15% (up to a maximum of 20%) of existing Santos shares outstanding rolling over into unlisted shares of a special purpose company (“Harbour RollCo”) that will remain invested in Santos;

+    Entry into binding debt financing commitments;

+    Completion of confirmatory due diligence;

+    Regulatory approvals, including approval by the Foreign Investment Review Board;

+    Unanimous recommendation of the Harbour Proposal by the Santos Board (in the absence of a superior proposal); and

+    Entry into binding transaction documentation, including standard deal protection mechanisms.

Harbour has indicated in its proposal that, whilst it has not reached any agreement, arrangement or understanding with them, ENN and Hony Capital (together Santos' largest shareholder) may wish to rollover their existing Santos shares into Harbour RollCo.

Rothschild & Co., J.B. North & Co. and Deutsche Bank are acting as financial advisers to Santos and Herbert Smith Freehills is acting as legal adviser to Santos. 

[1] Based on an AUD/USD exchange rate of 0.7662 as referenced in the Harbour Proposal

[2] Subject to receipt of a favourable tax ruling from the Australian Taxation Office



New service from OilVoice
Trip Shepherd is for companies who need to track their staff in areas of risk.
It's free to use, so we invite you to try it.

Visit source site

https://santos.com/media-centre/announcements/rece...

SantosHarbour EnergyDue DiligenceBif

More items from oilvoice


Cyber Security Experts Unite to Protect Europe’s Critical Industries

CS4CA Summit Returns to London this October Staying abreast of fast-paced industry developments is crucial for cyber security professionals. And while one can learn a lot from publications and social media, it's hard to beat the value of insights gained first-hand from peers. This is why 150+ IT ...

OilVoice Press - OilVoice


Posted 10 months agoPress > cybereurope

Africa E&P Summit

The organisers of the Africa E&P Summit are bringing together Africa's leading exploration companies and governments, just one of the many reasons why you should be attending frontier's event that they are organising and hosting in London at the IET: Savoy Place, 22-23 May. Over 200 key senior exec ...

OilVoice Press - OilVoice


Posted 1 year agoPress > Africasummitoil summit +2

Equinor Deepens in Offshore Wind in Poland

Equinor has exercised an option to acquire a 50 % interest in the offshore wind development project Bałtyk I in Poland from Polenergia. This transaction is a follow-up of the agreement between the two companies which came into force in May 2018 , by which Equinor acquired a 50 % inter ...

OilVoice Press - OilVoice


Posted 1 year agoPress > EquinorEquinor EnergyPoland +2

Nigeria has highest capex on crude and natural gas projects in sub-Saharan Africa Over Next Seven Years, says GlobalData

Nigeria accounts for more than 34% of the proposed capital expenditure (capex) on planned and announced crude and natural gas projects in the sub-Saharan Africa over the period 2018–2025, according to GlobalData , a leading data and analytics company. The company's report: ‘H2 2018 Production ...

OilVoice Press - OilVoice


Posted 1 year agoOpinion > GlobalDataNigeriaCrude +5

CNOOC Signs Strategic Cooperation Agreements with 9 International Oil Companies

HONG KONG, Dec. 18, 2018 /PRNewswire/ -- CNOOC Limited (the "Company", SEHK: 00883, NYSE: CEO, TSX: CNU) announced today that its parent company, China National Offshore Oil Corporation (CNOOC), has signed Strategic Cooperation Agreements with 9 international oil companies including: Chevron, Conoco ...

OilVoice Press - OilVoice


Posted 1 year agoPress > CNOOCChina National Offshore Oil CorporationChevron +11
All posts from oilvoice