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Investing.com-- Australian oil and gas major Santos said on Monday it received a non-binding, indicative takeover offer from a consortium led by a unit of Abu Dhabi National Oil Company (ADNOC).
The consortium, which is called the XRG Consortium, and includes Abu Dhabi Development Holding and Carlyle, is offering A$8.89 ($5.76) per Santos share, representing a 28% premium to the stock’s close on Friday. The offer values Santos at roughly $18.7 billion.
Santos said in a statement that the XRG offer follows two confidential offers from the consortium earlier this year.
Santos’ board of directors said it recommends the offer to shareholders, and that the company should engage in due diligence with the offer. The offer requires Santos enter an exclusivity deal with XRG.
Reuters had reported last year that ADNOC was considering a bid for Santos, which is one of Australia’s largest gas suppliers.
The firm was in talks with peer Woodside (OTC:WOPEY) Energy Ltd (ASX:WDS) for a potential merger, but negotiations collapsed last year. Reports had also shown that Saudi Arabia’s Aramco (TADAWUL:2222) was considering a bid for Santos.
Natural gas demand is expected to increase rapidly in the coming years, especially for generating electricity to power artificial intelligence data centers, as the technology gains popularity.