ADNOC-Led Group Drops $18.7 Billion Bid for Santos, Stalling Global Gas Expansion
ADNOC’s investment arm and partners have withdrawn their $18.7 billion takeover bid for Australian gas producer Santos, ending months of talks and slowing the UAE company’s global gas expansion strategy.
(Reuters) — The Abu Dhabi National Oil Company (ADNOC) international investment arm XRG said on Sept. 17 that an investor group it was leading had withdrawn an indicative $18.7 billion offer to buy Australian gas producer Santos.
The consortium, led by XRG alongside Abu Dhabi sovereign fund ADQ and private equity firm Carlyle, will not make a binding offer for Santos, XRG said in a statement, capping a takeover saga that has lasted months.
It is the third failed bid for Santos, highlighting the difficulties foreign firms face when trying to buy assets in Australia, and slowing ADNOC's aggressive overseas expansion.
Neither Santos nor the Australian government immediately responded to requests for comment outside of business hours.
"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," the statement, released after Australian financial markets closed, said.
Santos shares closed on Sept. 17 at $A7.65, well below the consortium's indicative $A8.89 per share offer.
The shares have consistently traded below the offer price since it was made in June, which analysts interpreted as a sign from investors that the deal was at risk of not proceeding.
Santos in June said the offer came after it had rejected two previous proposals made by the consortium in March, at $5.04 and $5.42 per share, that were not made public
Taking into account net debt, the deal would have given Santos an enterprise value of A$36.4 billion ($24.30 billion), which would have made it the largest all-cash corporate buyout in Australian history, according to FactSet data.
The consortium had extended its due diligence on Santos and had up until Friday to finalize a formal offer.
($1 = 1.4981 Australian dollars)