Harbour Energy makes $10.36bn binding offer to acquire Santos

US-based energy investment firm Harbour Energy has made a binding offer to acquire oil and gas company Santos for A$13.78bn ($10.36bn).

The new offer values Santos at $4.98 per share, which represents the same amount as Harbour’s indicative proposal last month.

Following its indicative offer, Harbour carried out a five-week due diligence process. Although there is no change in price, the new offer involves several alterations to the previously announced transaction structure.

Harbour intends to leverage the acquisition to strengthen its position in the global liquefied natural gas (LNG) market. The company also plans to make additional investments in Santos’ existing assets and acquire more natural gas and LNG-focused assets internationally.

Under the terms of the proposal, Harbour will offer a cash consideration for all shareholders except for Chinese investors ENN and Hony, which together own 15.1% of Santos. The deal offers an exclusive opportunity to ENN and Hony, allowing them to combine their existing Santos shares into a Harbour investment vehicle and get new shares.

Santos noted that its independent directors will examine the revised proposal and has advised shareholders not to take any action at this time.

In a statement, Santos said: “The board and management remain focused on continuing to deliver shareholder value through the transformation of Santos into a low-cost, reliable and high-performance business with strong growth potential.”

The new offer is conditional upon Harbour completing final confirmatory due diligence and signing a scheme implementation deed with Santos.