Oil Search open to merger proposal favouring shareholders

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OIL Search will be open to a merger proposal that is in favour of their shareholders, according to the petroleum company.
Oil Search said this in a market release following a statement by Santos Ltd disclosing details of its non-binding indicative change of control proposal.
Oil Search said it was always open to receiving and engaging on any proposal that was in the best interest of shareholders.
“Oil Search agrees with Santos that there is strategic logic in a combination of the two companies,” the company said.
However, it said the terms of any such combination needed to be fair for Oil Search shareholders and those in Santos’ original proposal were demonstrably not.
Oil Search noted that based on July 16 closing share prices for Oil Search and Santos, the proposed terms represented a premium of only 6.8 per cent despite Santos shareholders owning 70 per cent more of the equity than Oil Search shareholders.
Oil Search communicated to Santos that it is open to receiving a revised proposal which more appropriately reflected the value which Oil Search would bring to any combined entity.
“At this stage, no such proposal has been forthcoming.”
Meanwhile, Santos, in a statement on Tuesday, said the company, on June 25, submitted a confidential, non-binding indicative all-scrip merger proposal to the Oil Search board.
“Following approval of the scheme, Oil Search shareholders would own 37 per cent of the merged group and Santos shareholders would own 63 per cent,” it said.
“On July 9, Santos received a letter from Oil Search which acknowledged the strengths of the combined company and the rationale for the merger proposal, but noted that the proposal did not offer appropriate value for Oil Search shareholders or a basis on which discussions could be progressed.
“Santos has subsequently sought to engage the Oil Search board on the transaction rationale and the opportunity for Oil Search shareholders to participate in the value created by the merger.”

One thought on “Oil Search open to merger proposal favouring shareholders

  • The first question for Oil Search shareholders is why will Oil Search agreeing to merge with Santos when it is declaring sound return on investment as well as other revenue streaming projects lining up. (https://www.oilsearch.com/__data/assets/pdf_file/0016/54331/01.-20210223_OSH_ASX_FY20_Results-and-Presentation_Final.pdf).
    The initial proposal is a loose/win for Oil Search in terms of share distribution. Will it affect the 17.6% interest of GoPNG. Will it increase or decrease employment for nationals etc. some critical questions should be asked before engaging into this merger. Sadly, one of the pioneering organization and the pride of PNG will no longer be heard of when this happens. Oil Search name is PNG oil and this was where it originally built is positional portfolios before expanding to Alaska.

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