Santos Ltd., Adelaide, has revealed its rejection of a $7.14 billion (Aus.) takeover bid from an Arab-Asian investment syndicate known as Scepter Partners.
The bid, an offer of $6.88/share of Santos, was received earlier this week, but Santos has only disclosed the offer Oct. 22 after the board meeting dismissed the offer as “opportunistic.”
Santos Chairman Peter Coates said the proposal neither fit in with the options the company is considering as part of its asset sales process, nor did it reflect the fair underlying asset value of Santos.
Coates added that the proposal was subject to a number of conditions, some of which would be adverse to Santos’ continued evaluation of other alternatives in its current strategic review process.
The review, announced last August, is looking at all options to restore and maximize shareholder value. This review is ongoing, and Coates said it will continue to consider all proposals that deliver appropriate value and certainty for shareholders.
Scepter investors include members of the Brunei and Dubai royal families and is described as a leading merchant bank and direct investment syndicate for sovereign wealth led by the former Blackstone Advisory Partners Asia team. It represents in excess of $14 billion in discretionary assets and more than $100 billion in net worth of its core shareholders.
Scepter’s offer is a 26% premium on Santos’ last closing share price of $5.44 (Aus.), but is still well below a recent valuation of $8.34 (Aus.)/share made by analyst Morgan following the bringing on stream of the Gladstone CSG-LNG project in Queensland.
Santos has recently been through tough times because of its large $8.8-billion debt during a time of oil and LNG price weakness, but it is still regarded as a high-value collection of assets.