Harbour Energy Australia Pty. Ltd., Perth, has increased its previous offer for all of the shares of Santos Ltd., Adelaide, to $5.21/share (OGJ Online, May 17, 2018).
The revised binding, conditional proposal to acquire the shares by way of a scheme of arrangement is equivalent to $6.95 (Aus.)/share based on an exchange rate of 0.75.
It follows earlier offers from Harbour of $4.98/share on May 17 and $5.12/share received by Santos on May 19. The new bid values Santos at $14.5 billion (Aus.).
Santos said in a statement that the new proposal is conditional on Santos undertaking additional hedging of oil-linked production in 2018 of 30% along with changes to hedging in 2019.
Santos added that Harbour’s latest proposal also indicated the offer price would be increased to a UD dollar equivalent of $7 (Aus.)/share if Santos also agrees to hedge 30% of its oil-linked production in 2020.
Harbour said that the additional hedging is not required to support its financing. Instead it enables the company to reduce transaction costs and increase the offer price.
Independent Santos directors are now considering the new offer.