Santos suitor Harbour Energy sweetens deal in takeover bid

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  • The offer represents a 4.6% premium to last week’s bid.
  • Deal is conditional on Santos entering into hedging contracts for oil production .

Santos advised the market that it’s received an upgraded offer from private-equity bidder Harbour Energy.

The binding, conditional offer values Santos at $US5.21 per share — up from last week’s offer of $US4.21 (an increase of 4.6%).

That’s equivalent to around $6.95 assuming an exchange rate of 0.75. Harbour Energy said it would raise the bid further — to the equivalent $7 per share — if Santos agrees to enter hedging contracts on 30% of its oil-linked production by 2020.

The revised proposal is also conditional on Santos’ additional hedging of oil-linked production in 2018 and 2019.

Santos said the revised offer was still subject to multiple conditions, including the completion of due diligence.

The deal will also have to be signed off by the Foreign Investment Review Board (FIRB) and be recommended for shareholder approval by the independent directors of the Santos board.

“There is no certainty that the Revised Harbour Proposal will result in an offer for Santos that is capable of being considered by shareholders,” Santos said.

“Santos shareholders are advised to take no action in relation to the Revised Harbour Proposal at this time.”

A short time ago, Santos shares were up 2.4% at $6.40 per share.

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