Santos Submits Formal Offer to QGC Board
Santos Ltd. on Thursday made a formal offer for Queensland Gas Co. (QGC) of at least $1.80 per share, which includes plans to create a robust new competitor in the eastern Australian gas industry.
The formal offer, valued at approximately $960 million, was lodged with the QGC Board of Directors following discussions with QGC.
The Santos offer involves:
--$1.30 per share cash for all QGC shares; --creation of a "New QGC" which will have approximately 9 trillion cubic feet (TCF) of original gas in place (OGIP); and --an issue of New QGC shares to existing QGC shareholders on a one-for-one basis.
Santos has placed a value of at least 50 cents per share on the New QGC shares, taking the total implied offer consideration to at least $1.80 per share. If Santos and QGC proceed to implement the proposal, Santos expects an independent expert's report would be commissioned to provide QGC shareholders with both a valuation range for the New QGC shares and the entire consideration payable under the offer.
Santos' Managing Director, Mr John Ellice-Flint, said the company looked forward to positive consideration of Santos' formal offer by the QGC Board.
"Santos has structured its offer to provide QGC shareholders with a very attractive cash component and shares in a dynamic new entity that would be led by QGC's Managing Director Richard Cottee and his highly successful team," Mr Ellice-Flint said.
"New QGC will benefit from unique commercial agreements with Santos which will enable the new entity to quickly bring new gas supplies to market and be an active independent participant in a very competitive gas market from day one," he said.
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Company: Queensland Gas Co. more info
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