Santos rejects bid

 EMBATTLED Australian oil and gas producer Santos Ltd has rejected a A$7.1 billion (K14.56b) takeover proposal from a fund backed by the ruling families of Brunei and the United Arab Emirates.

Santos effectively put itself on the block in August, looking to sell assets in a bid to cut its A$8.8 billion (K18b) net debt as its Gladstone liquefied natural gas project begins operations amid a sharp slump in oil prices.

It said the bid from Bermuda-headquartered Scepter, pitched at a 26 per cent premium to its close on Wednesday, was too cheap and included conditions that would hurt its consideration of asset sales and a wider strategic review.

“The proposal is considered to be opportunistic in nature and does not reflect the fair underlying asset value of the company,” Santos said in a statement to the Australian stock exchange.

Santos shares jumped as much as 20 per cent on news of the bid, but were still worth only half as much as a year ago.

Scepter had no immediate comment on the rejection, its head of merchant banking, Anthony Steains, said. – Reuters