A major Australian gas producer rejects any suggestion the withdrawal of a suitor signals valuation issues, saying the bidder was positive about the group.
Abu Dhabi National Oil Company late on Wednesday pulled back its indicative proposed $US18.7 billion ($A28 billion) cash takeover for Santos at $US5.262 per share.
The decision by the bidder’s foreign investment arm XRG, alongside Abu Dhabi sovereign fund ADQ and private equity firm Carlyle, not to proceed to a binding offer caps off a months-long takeover saga.
“While the consortium maintains a positive view of the Santos business, a combination of factors, when considered collectively, have impacted the consortium’s assessment of its indicative offer,” it said.
“While disappointed not to move forward, XRG, and its consortium partners, are responsible, disciplined investors with a clear focus on creating value for our shareholders and driving long-term growth.”
On Thursday, Santos highlighted that the XRG consortium had confirmed it maintained a positive view of its business and “respect for its management team”.
The XRG consortium wouldn’t agree to an appropriate allocation of risk between itself and Santos shareholders to finalise a scheme of implementation agreement, it added.
“This included the obligation of the XRG consortium to secure regulatory approvals and the provision of a reasonable commitment to the development and supply of domestic gas.”
Santos chair Keith Spence emphasised the group’s “low-cost operating model” and strong free cashflow.
“Our strategy is clear: generate cash, reward shareholders, reinvest to backfill and sustain our infrastructure, and build and grow our production, while continuing to operate safely and reliably,” he said.
with Reuters