In June, Santos received a non-binding indicative proposal from the XRG consortium, which includes Abu Dhabi Development Holding Company (ADQ) and US-based investment firm Carlyle.
The proposal is for the acquisition of all of the ordinary shares on issue in Santos for a cash offer price of $5.76 per Santos share via a scheme of arrangement.
Santos announced in a statement on June 27 that it has entered into a process and exclusivity deed with the consortium.
The consortium had been granted exclusive due diligence access for a period of six weeks, starting June 27.
Earlier this month, the consortium had substantially completed due diligence, while Santos consented to an extension until August 22 to enable the XRG consortium to finalise due diligence and progress a scheme implementation agreement (SIA).
Talks ongoing
However, Santos said in an update on Tuesday that the “parties are yet to reach agreement on acceptable terms of a binding SIA.”
Further, Santos has this week been informed by the cnsortium that “even if the terms of an SIA were agreed and final due diligence was complete, it will still not be in a position to sign a binding SIA, as it is yet to obtain requisite final approvals which are required by the XRG consortium in order to enter into a binding transaction.”
“The XRG consortium has indicated that these approvals are expected to take four weeks to obtain (assuming an expedited process, potentially longer without) from the time that both due diligence is complete and the terms of an SIA are agreed in principle,” Santos said.
Accordingly, Santos does not expect the parties to enter into a binding SIA by Friday, August 22, when the exclusivity period under the process deed expires.
Notwithstanding this development, discussions with the XRG consortium remain ongoing, Santos said.
Santos said that its shareholders do not need to take any action in relation to this announcement.
The company noted there is no certainty that the consortium will enter into a binding SIA on terms acceptable to Santos or that the potential transaction will proceed.
Results
The release of Santos’ results for the half-year ended June 30, will be deferred to August 25 to align with the conclusion of the consortium’s exclusivity period under the process deed.
As part of the results announcements, Santos will provide a further update on the status of discussions with the consortium, the firm said.
