- Santos (STO) confirms its interest in Papua New Guinea-based energy player Oil Search (OSH) after lobbing a bid for the ASX-lister last month
- Oil Search knocked back an initial offer of $4.25 per OSH share, but Santos appears interested in furthering discussions
- Santos says the merger offers superior value to Oil Search shareholders than continuing on a standalone basis
- The proposal comes amid executive woes for Oil Search, which saw it managing director resign yesterday due to "behavioural issues"
- Santos shares were trading in the grey at $6.83, meanwhile Oil Search shares were up 4.5 per cent
Santos (STO) has confirmed its interest in Papua New Guinea-based energy player Oil Search (OSH) after revealing it had lobbed a bid for the ASX-lister last month.
The energy giant tabled a merger proposal to OSH on June 25, offering investors 0.589 new Santos shares for each Oil Search share held at $4.25 apiece, marking a 12 per cent premium on the previous day's closing price.
Oil Search has since knocked back the offer on the grounds it believes the offer "did not offer appropriate value for Oil Search shareholders or a basis on which
discussions could be progressed."
Santos seems to remain persistent in its pursuit in the company and has expressed its desire to engage the Oil Search board for further discussions on the matter.
The proposed buy could see the new entity pushed into the top-20 ASX-listed companies and the 20 largest global oil and gas companies. Notably, Santos would have access to Oil Search's significant oil presence in Papua New Guinea.
It comes less than a day after Oil Search revealed its Managing Director Keiran Wulff would be stepping down amid a series of complaints about his behaviour.
In its announcement to market, Santos affirmed a merger proposal represents an extremely attractive opportunity.
"The strategic rationale for a merger is clear and offers superior value to Oil Search shareholders rather than continuing on a standalone basis," the statement read.
Santos shares were trading in the grey at $6.83, meanwhile Oil Search shares were up 4.5 per cent at 12:05 pm AEST.