Santos could see rival bid prepared by Macquarie bankers - report
22 APR 2018
Macquarie Capital bankers are said to be working on a rival takeover plan for Santos [ASX: STO], The Australian’s Dataroom reported.
According to the unsourced report, under Macquarie’s plan Total [EPA: FP] and Quadrant Energy, the Australia-based oil and gas business, would partner to buy Santos, which is already subject to an AUD 13.5bn (USD 10.4bn) offer from Harbour Energy.
The paper said that as part of the Macquarie proposal Total would take control of the Santos PNG LNG project, while Quadrant, and potentially other Macquarie–related entities, would buy the group’s Australian operations.
The item noted that Total is already a major player in the PNG LNG space.
Meanwhile, the report noted that Quadrant Energy itself has been on the market. The paper noted that Quadrant’s majority owners, Brookfield and Macquarie have been fielding offers for the business and Brookfield has been considering selling its stake in a separate process advised by Citi.
The paper noted that the Quadrant sale is on hold while the owners determine whether selling the whole company or pursuing Santos are better alternatives.
The paper noted that Harbour’s offer for Santos still has a long way to go and the possible rivals could wait until Harbour’s bid becomes more conclusive before proceeding.
The paper said that Total would likely pay around AUD 6bn for PNG LNG, which would require Quadrant’s owners, Brookfield, Macquarie and Wesfarmers [ASX: WES] to provide around AUD 7bn in debt and equity for the Australian assets, which include Darwin LNG, West Australian Gas, and interests in Gladstone LNG and the Cooper Basin.
The paper noted that Goldman Sachs is believed to be close to the Total and Quadrant camp.
The item also noted that UBS is advising major Santos shareholder ENN.
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