Log in
Show password
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
  1. Homepage
  2. Equities
  3. Australia
  4. Australian Stock Exchange
  5. Oil Search Limited
  6. News
  7. Summary
    OSH   PG0008579883


SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Papua New Guinea-focused Oil Search rebuffs $6.5 billion Santos bid

07/20/2021 | 01:35am EDT
FILE PHOTO: The logo of Australian oil and gas producer Santos Ltd is pictured at their Sydney office

MELBOURNE (Reuters) - Oil Search rejected an unsolicited takeover proposal from Santos Ltd valuing the Papua New Guinea-focused oil and gas producer at A$8.8 billion ($6.5 billion), but both companies said on Tuesday they wanted to pursue further talks.

Oil Search said the offer was not in the best interests of shareholders, but its shares rose 8% after both companies said it made sense to create a group that would rival Australia's top independent gas producer Woodside Petroleum in market value.

"Oil Search agrees with Santos that there is strategic logic in a combination of the two companies," Oil Search said in a statement, but added that Santos had yet to come back with a fair offer.

The approach comes at a vulnerable time for Oil Search as it is searching for a new chief executive to replace Keiran Wulff, who quit on Monday following just 17 months in the job due to ill health and following a whistleblower complaint. It also just put on hold a final decision on a $3 billion oil project in Alaska.

Santos made the approach on June 25, but the proposal was only revealed on Tuesday after Oil Search Chairman Rick Lee a day earlier, on a call about Wulff's resignation, told analysts the company had not received any approaches.

Santos said it proposed to offer 0.589 new Santos shares for each Oil Search share held. Based on Santos' closing share price on June 24, that was worth A$4.25 per Oil Search share, a 12% premium to Oil Search's share price at the time.

"Santos continues to believe that the merger proposal represents an extremely attractive opportunity to deliver compelling value accretion to both Santos and Oil Search shareholders," Santos said in a statement.

Oil Search shares were up 7% at A$3.93 in afternoon trade in a broader market that was trading lower. Santos shares were down 4%.

"The bid comes at a pretty opportune time (for Santos), but it's unlikely to get up at that level of premium," said Andy Forster, a portfolio manager at Argo Investments, which holds shares in both Santos and Oil Search.

Oil Search's former top shareholder, Abu Dhabi state investor Mubadala, sold nearly half its 9.5% stake in Oil Search for A$3.865 a share in June, just before Santos made its takeover approach.

Santos declined to say whether it bought any of Mubadala's shares.

A takeover of Oil Search would give Santos a bigger stake in the Exxon Mobil Corp-led PNG LNG project in Papua New Guinea, considered one of the world's lowest cost liquefied natural gas producers, and give it a stake in the Papua LNG project, on track to be developed by TotalEnergies.

Santos would also become operator of the Pikka oil project in Alaska.

Santos, advised by Citi and JB North & Co, said it has sought to engage the Oil Search board on the rationale for merging. Oil Search is being advised by Goldman Sachs and Macquarie Capital.

Oil Search rejected an $8 billion all-share takeover plan from Woodside in 2015.

($1 = 1.3622 Australian dollars)

(Reporting by Sonali Paul in Melbourne and Nikhil Kurian Nainan in Bengaluru; Editing by Lincoln Feast and Richard Pullin)

By Sonali Paul and Nikhil Nainan

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
ARGO INVESTMENTS LIMITED 0.00% 8.96 End-of-day quote.7.05%
EXXON MOBIL CORPORATION 2.97% 59.3 Delayed Quote.43.86%
ISTOXX FP GR DEC 2.54 (EUR) 0.15% 41.66 Delayed Quote.0.00%
LONDON BRENT OIL 1.13% 80.29 Delayed Quote.49.38%
OIL SEARCH LIMITED 1.99% 4.11 End-of-day quote.10.78%
S&P GSCI NATURAL GAS INDEX 6.98% 286.6842 Delayed Quote.104.81%
SANTOS LIMITED 1.97% 6.74 End-of-day quote.7.50%
TOTALENERGIES SE 3.44% 41.06 Real-time Quote.16.32%
WOODSIDE PETROLEUM LTD 3.20% 22.88 End-of-day quote.0.62%
WTI 1.08% 76.221 Delayed Quote.52.07%
09/22Australia shares rise for third session on tech, energy boost
09/14Australian Index Post Marginal Gains as Energy Sector Rises Amid Slow US Oil Output Res..
09/13Tech stocks drag Australian shares lower; energy firms jump
09/13NEWS HIGHLIGHTS : Top Energy News of the Day
09/12Aurelia Metals' New Non-Executive Director to Succeed as Chairman
09/10Energy Flat As Gas Futures Linger Near 7-Year Highs -- Energy Roundup
09/10SANTOS : And oil search combine to create a regional champion
09/10S&P/ASX 200 : Australian Shares Rebound on Friday's Close; Santos, Oil Search Sign Deal to..
09/10Miners, energy stocks power Australian shares as commodity prices shine
09/10Santos, Oil Search Sign Merger Deal to Create $16 Billion Asian Oil and Gas Giant
More news
Analyst Recommendations on OIL SEARCH LIMITED
More recommendations
Financials (USD)
Sales 2021 1 543 M - -
Net income 2021 402 M - -
Net Debt 2021 2 228 M - -
P/E ratio 2021 15,4x
Yield 2021 2,72%
Capitalization 6 498 M 6 502 M -
EV / Sales 2021 5,65x
EV / Sales 2022 4,94x
Nbr of Employees 1 243
Free-Float 99,9%
Duration : Period :
Oil Search Limited Technical Analysis Chart | OSH | PG0008579883 | MarketScreener
Technical analysis trends OIL SEARCH LIMITED
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 12
Last Close Price 2,99 $
Average target price 3,51 $
Spread / Average Target 17,3%
EPS Revisions
Managers and Directors
Peter J. Fredricson Chief Executive & Financial Officer
Richard John Lee Chairman
Beth White EVP-Group Finance, Sustainability & Technology
Agu Jan Kantsler Independent Non-Executive Director
Eileen Joy Doyle Independent Non-Executive Director
Sector and Competitors
1st jan.Capi. (M$)
CNOOC LIMITED18.11%46 282
EOG RESOURCES, INC.64.05%45 599