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- Santos (STO) puts the right price on an Oil Search (OSH) takeover as the company urges shareholders to accept a revised bid from the energy behemoth
- The Oil Search board said it intends to unanimously recommend the buy to shareholders
- Santos is offering $4.52 per share compared to the $4.25 it put forward in July, which was knocked back by OSH
- The parties are set to begin mutual due diligence, which will take approximately four weeks to complete
- Oil Search shares are up 7.09 per cent to trade at $4.08 while Santos shares are up 2.17 per cent to trade at $6.59
Santos (STO) appears to have put the right price on an Oil Search (OSH) takeover as the company urges shareholders to accept a revised bid from the energy behemoth.
The Oil Search board said it intended to unanimously recommend its investors accept the increased $4.52 per share takeover offer from Santos, after knocking back an initial proposition of $4.25 apiece last month.
The revised proposal would increase OSH shareholders’ ownership of the merged group from 38.5 per cent put forward in the previous offer to 36.9 per cent.
Oil Search and Santos are set to enter a mutual due diligence arrangement based on the proposal, which is expected to take four weeks to complete.
The proposed buy could see the new entity pushed into the top-20 ASX-listed companies and the 20 largest global oil and gas companies. Notably, Santos would have access to Oil Search’s significant oil presence in Papua New Guinea.
The merger will need Oil Search shareholder approval, Papua New Guinea court approval and regulatory approvals to fully go ahead.
Oil Search advised it would update the market and shareholders in due course but noted there was no guarantee of the transaction going ahead.
At 10:52 am AEST, Oil Search shares are up 7.09 per cent to trade at $4.08 while Santos shares are up 2.17 per cent to trade at $6.59.
