Overview

• XRG, the overseas unit of ADNOC, with partners ADQ and Carlyle, withdrew its non-binding proposal and confirmed it would not lodge a binding offer before the September 19 deadline.
• Santos shares fell nearly 14% in the next trading session as the takeover premium evaporated and arbitrage investors exited the stock.
• Sources and company statements pointed to disagreements over valuation, the allocation of regulatory risk, disclosure timing, Papua New Guinea tax liabilities, and domestic gas supply obligations.
• Santos said it was prepared to finalize terms at US$5.626 per share after the interim dividend, down from June’s US$5.76 indication, a deal that FactSet estimated at A$36.4 billion including net debt and one of Australia’s largest prospective all-cash buyouts.
• Chief executive Kevin Gallagher said Santos will remain independent, target delivery of the Barossa LNG and Pikka oil projects, and focus on lifting production and cash flow over the next several years.