General – No Final Bid
Abu Dhabi National Oil Co dropped its planned $18.7 billion takeover of Australian natural gas producer Santos, walking away from an ambitious effort to expand overseas.
A combination of factors discouraged the company’s XRG unit from making a final bid, it said Wednesday.
The decision was strictly commercial and reflected disagreement over terms, including on valuation and tax, people familiar with the matter said, asking not to be identified discussing private information.
It’s a notable retreat for XRG, the Adnoc spinoff that’s been looking to splash out billions to build up a global portfolio, particularly in the fast-growing liquefied natural gas market. Following deals for LNG supply in the US and Africa, the Santos acquisition would have given the group greater heft and access to Asia.
The company made its indicative offer in June with a consortium that included Abu Dhabi Development Holding Co. and Carlyle Group Inc. The board of Santos, Australia’s second-largest fossil-fuel producer, recommended the $5.76-a-share proposal, which represented a 28% premium to the stock price at the time.
Although the shares surged that day, they remained below the offer price, possibly indicating that investors doubted the consortium could secure the deal. Santos extended an exclusivity period for a second time last month, stating the group needed more time to finish due diligence and obtain approvals.
