An XRG-led consortium, including Abu Dhabi Development Holding Company (ADQ) and Carlyle, has withdrawn its US$18.7 billion ($28.17 billion) indicative offer to acquire 100 per cent of the issued shares of Australian oil and gas producer Santos.
The move follows months of negotiations, extensions, and due diligence, with the consortium ultimately deciding not to progress with a binding proposal.
In its statement, XRG said: “The decision not to proceed with a binding offer comes after extensive evaluation and consideration of commercial factors.”
Last month, Santos agreed to extend its Process and Exclusivity Deed for a second time to allow the parties to finalise a Scheme Implementation Agreement (SIA) and for the consortium to obtain necessary approvals.
At that stage, the XRG group confirmed it had found no issues during due diligence that would prevent it from continuing.
Santos had expected a binding proposal at the agreed price of US$5.62 per share by 19 September.
Instead, the company received notification that the consortium was withdrawing its indicative offer.
Santos noted that the consortium’s reluctance to take on a “fair distribution of risk” — particularly its responsibility for securing regulatory approvals and commitment to the ongoing development and supply of domestic gas — was a key factor in the failure of negotiations.
In a separate statement, XRG said: “While disappointed not to move forward, XRG and its consortium partners are responsible, disciplined investors with a clear focus on creating value for our shareholders and driving long-term growth.”
The withdrawal comes after a series of takeover approaches for Santos in recent years.
In June, Santos confirmed that the XRG consortium’s US$18.7 billion proposal followed two earlier, undisclosed offers made in March at US$5.04 and US$5.42 per share, according to Reuters reports.
Santos has fended off major bids in the past, including a $10.8 billion offer from private equity-backed Harbour Energy in 2018.
Last year, it ended talks with rival Woodside Energy that could have created an Australian oil and gas giant with a potential valuation of $80 billion.
