Acquisition Uncertainty Looms Over Santos as Deal Faces Approval Delays
Santos Limited delays its half-year results amid ongoing acquisition discussions with the XRG Consortium, which faces a four-week wait for final approvals before a binding deal can be signed.
- XRG Consortium completes due diligence but delays binding agreement
- Final approvals needed by consortium expected to take four weeks
- Exclusivity period expires on 22 August without binding deal
- Santos defers half-year results release to 25 August
- Ongoing discussions continue despite uncertainty over transaction
Acquisition Process Update
Santos Limited (ASX, STO) has provided a significant update on the potential acquisition led by the XRG Consortium, which includes the Abu Dhabi National Oil Company and partners ADQ and Carlyle. While the consortium has substantially completed its due diligence, the parties have yet to agree on the terms of a binding scheme implementation agreement (SIA). This delay stems from the consortium’s need to secure final approvals, a process expected to take around four weeks even under expedited conditions.
Exclusivity Period and Transaction Timing
The exclusivity period granted to the XRG Consortium under the Process and Exclusivity Deed is set to expire on 22 August 2025. Given the outstanding approvals and unresolved agreement on binding terms, Santos does not anticipate entering into a binding SIA by this deadline. Despite this, both parties remain engaged in discussions, signaling that the potential transaction is not yet off the table but faces meaningful hurdles.
Impact on Financial Reporting
In light of these developments, Santos has deferred the release of its half-year results for the period ending 30 June 2025 to 25 August 2025. This postponement aligns the financial disclosure with the conclusion of the exclusivity period, allowing the company to provide shareholders with a more comprehensive update on the status of the acquisition talks. The half-year report and investor presentation will be made available on Santos’ website, accompanied by a webcast briefing to address investor and analyst questions.
Market and Shareholder Considerations
Santos has emphasized that shareholders are not required to take any immediate action regarding the announcement. The company also cautions that there is no certainty the XRG Consortium will finalize a transaction on terms acceptable to Santos or that the deal will proceed at all. This measured communication reflects the inherent uncertainties in large-scale acquisitions, especially those involving multiple regulatory and approval layers across jurisdictions.
Looking Ahead
As Santos navigates this complex acquisition landscape, the market will be watching closely for any signs of progress or setbacks. The extended timeline for approvals and the absence of a binding agreement by the exclusivity deadline introduce a degree of unpredictability, underscoring the importance of forthcoming updates from the company.
Bottom Line?
Santos’ acquisition saga enters a critical waiting period, with final approvals set to dictate the next move.
Questions in the middle?
- Will the XRG Consortium secure the necessary final approvals to proceed?
- How might the delayed acquisition impact Santos’ share price and investor confidence?
- What alternative strategies might Santos pursue if the deal falls through?
