XRG consortium offers non-binding, indicative proposal to acquire Santos

Indicative proposal price

The proposal is for the acquisition of all of the ordinary shares on issue in Santos (Santos share) for a cash offer price of US$5.76 (AUS$8.89) per Santos share via a scheme of arrangement (potential transaction) (indicative proposal).

As at the close of trading on the ASX on 13 June 2025, the Indicative Proposal of US$5.76 (AUS$8.89) per Santos share represented a:

• 28% premium to the last closing price of AUS$6.96.
• 30% premium to the one-week volume weighted average price (VWAP) of AUS$6.82.
• 34% premium to the one-month VWAP of AUS$6.61.
• 44% premium to the three-month VWAP of AUS$6.19.
• 39% premium to the six-month VWAP of AUS$6.40.

The indicative proposal is expressed as a “final non-binding indicative offer” and follows two confidential, non-binding and indicative proposals from the XRG Consortium to acquire 100% of Santos Shares on 21 March 2025 for US$5.04 (AUS$8.00) in cash per share and on 28 March 2025, for US$5.42 (AUS$8.60) in cash per share.

Key conditions

The indicative proposal is subject to the satisfactory completion of confirmatory due diligence by the XRG consortium and the negotiation and execution of an agreed scheme implementation agreement (SIA) with Santos on customary terms and conditions.

Implementation of the scheme under the SIA would be conditional on (among other things) customary approval from the Foreign Investment Review Board, Australian Securities and Investments Commission, National Offshore Petroleum Titles Administrator, PNG Securities Commission, PNG Independent Consumer and Competition Commission, and Committee on Foreign Investment in the United States.

Due diligence access

After careful consideration of the indicative proposal (including in consultation with its financial and legal advisers), the Santos Board has determined that it is in the best interests of Santos Shareholders to provide the XRG consortium with access to confidential information to conduct confirmatory due diligence and negotiate the terms and conditions of an SIA, subject to reaching agreement with the XRG Consortium on the terms on which access to due diligence will be provided.

The XRG consortium has indicated that it requires Santos to enter into a process and exclusivity deed (to include, among other things, exclusivity restrictions) before it progresses to undertaking confirmatory due diligence and negotiating the terms of the SIA. Santos intends to negotiate the terms of the process and exclusivity deed and an associated confidentiality deed with the XRG consortium.

Next steps for the indicative proposal

The Santos Board confirms that, subject to reaching agreement on acceptable terms of a binding SIA, it intends to unanimously recommend that Santos shareholders vote in favour of the potential transaction, in the absence of a superior proposal and subject to an independent expert concluding, and continuing to conclude, that the potential transaction is fair and reasonable and in the best interests of Santos shareholders.

Santos shareholders do not need to take any action in relation to the indicative proposal. Santos notes that there is no certainty that the XRG consortium will enter into a binding SIA or that a potential transaction will proceed. Santos will continue to keep its shareholders informed in accordance with its continuous disclosure obligations.

Goldman Sachs and JB North & Co are acting as financial advisers to Santos; Rothschild & Co is acting as independent board adviser. Herbert Smith Freehills Kramer is acting as legal adviser to Santos.

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/16062025/xrg-consortium-offers-non-binding-indicative-proposal-to-acquire-santos/