Shares of Santos surged as much as 15.23% Monday, after it received a non-binding takeover offer of $18.72 billion by an Abu Dhabi’s National Oil Company-led group.
The move marks the biggest intraday jump in the Australian oil and gas producer’s shares since April 2020, LSEG data shows.
The takeover bid led by ADNOC’s investment arm XRG follows two confidential, non-binding and indicative proposals from the same consortium on Mar. 21 and Mar. 28, Santos noted in a Monday announcement.
The consortium also includes the Abu Dhabi Development Holding Co and global private equity firm Carlyle Group.
It has offered a cash offer price of $5.76 (8.89 Australian dollars) per Santos share, which translates to a 27.73% premium from its closing price of AU$6.96 ($4.52) last Friday.
Santos’ board said it intends to “unanimously recommend” the company’s shareholders to vote in favor of the potential transaction, in the absence of a superior proposal.
XRG’s takeover bid comes as the investment firm – which has an enterprise value of over $80 billion – has been on the hunt for deals in the natural gas, chemicals, and lower-carbon energy solutions space.
Santos has had unsuccessful takeover attempts in the past few years given its poor share price movements.
The company reportedly rejected offers from U.S.-based Harbour Energy, while its merger with Australian energy player Woodside Energy Group fell apart after both companies failed to agree on the valuation.
Still, Santos has remained an attractive takeover target, especially among players in the Middle East.
The acquisition of Santos would give the consortium control of two Australian liquefied natural gas operations – Gladstone LNG on the east coast and Darwin LNG in the north of Australia – as well as stakes in PNG LNG and the undeveloped Papua LNG.
