This morning, shares of Santos Limited [ASX:STO] have shot up by as much as 18.34%. At the time of writing, they’re up 16.17%.
Harbour Energy bid
Recently, Santos received a $10.4 billion takeover offer from Harbor Energy as a cash bid that caught the board’s interest.
Santos stated that it was Harbour Energy’s fourth unsolicited bid for the company, while holding stakes in liquefied natural gas projects in a region which has strong gas demands.
The Santos board believes that it is in the interests of shareholders to progress with Harbour.
Harbour want to fund the overall takeover through a combination of equity and debt.
Euronews.com reported that Harbor Energy Chief Executive stated:
‘With the support of these providers of capital, Harbour stands ready to move expeditiously towards entering into a Scheme Implementation Agreement and to commencing all necessary government and regulatory review processes.’
Last year, Santos rejected a $9.5 billion takeover offer from Harbour Energy, stating that it undervalued the company.
Full year results
Santos delivered a significant turnaround regarding overall business performance.
Net debt has decreased and free cash flow has significantly increased.
The company’s underlying profit has massively grown by a total of 433%.
Santos has managed to remove substantial costs while reporting a material increase in profits, this helped generate significant free cash flow and an overall reduced debt.
Now standing as a stronger more resilient company, Santos has the capacity to bring on further growth opportunities across its core long-life gas assets.
Santos reported that its retired chairman Peter Coates stated:
‘The Board, working closely with Kevin Gallagher and his largely new senior executive team have made lasting changes to the way Santos works over the past two years, creating a materially lower cost structure for the entire business. The productivity improvements have opened up new opportunities for growth in the Cooper Basin, NSW and Queensland.’
Mr Coates wishes further success upon the company and its shareholders.
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