Harbour Energy Ltd chief executive officer Linda Cook said she would seek to expand Santos Ltd in Asia and Africa after making a A$13.5 billion (US$10.3 billion) offer for Australia’s third-largest energy producer.
US-based Harbour would look to grow Santos’ gas assets in South Australia’s Cooper Basin, the ConocoPhillips-operated Darwin liquefied natural gas (LNG) plant in the Northern Territory and in Papua New Guinea, Cook said in a telephone interview yesterday.
The Adelaide-based company granted Harbour due diligence after receiving the indicative proposal worth A$6.50 per share on Thursday last week, it said in a statement yesterday.
Santos shares jumped as much as 22 percent to A$6.20 and traded at A$5.905 at 3:29pm. The company’s US$800 million 2027 bonds were set for the biggest gain since the notes were sold in September last year.
“Our focus areas would be in Asia and Africa in particular,” Cook said when asked about Harbour’s plans for Santos. “We are big believers in the liquefied natural gas story. Our focus for Santos going forward would be in natural gas and LNG in particular.”
Santos would continue to focus on its existing assets, including stakes in the Gladstone liquefied natural gas plant in Queensland, the Darwin LNG facility and a holding in Exxon Mobil Corp’s Papua New Guinea LNG project, chief executive officer Kevin Gallagher said.
“Santos’ strategy before anybody is taking us over is very much focused on Australia and Asia. There is no Africa,” Gallagher said in a telephone interview. “If Harbour Energy is focused on Africa, that’s really their strategy.”
An alliance Santos entered last year with its top investors, China’s ENN Energy Holdings Ltd (新奧能源) and Hony Capital (弘毅投資), to coordinate investment in LNG production in Australia and Papua New Guinea would not be affected by the offer, he said.
The A$6.50 per share proposal followed offers of A$6.37 on Tuesday last week and A$6.25 on March 22, Santos said in the statement.
“We do see this latest Harbour Energy approach as a knock-out bid, one which the board of Santos will struggle to turn down,” RBC Capital Markets LLC analyst Ben Wilson wrote in a note. “The additional measures taken by Harbour to accommodate ENN/Hony and fulsome indications of bid financing offer further evidence of intent from the bidder.”
Harbour’s a joint venture led by resources investment house EIG Global Partners.
In November last year, Santos said it rejected Harbour’s A$4.55 per share non-binding proposal made in August last year due to an “inadequate” price and uncertain funding.
Harbour said the latest offer would be funded by US$7.75 billion of debt to be underwritten by JPMorgan Chase & Co and Morgan Stanley, with the balance in equity from Harbour, other EIG-managed funds and global trader Mercuria Global Energy.
AI SPLURGE: The four major US tech companies have lost more than US$950 billion in value since releasing earnings and outlooks, while equipment makers were gaining Four of the biggest US technology companies together have forecast capital expenditures that would reach about US$650 billion this year — a flood of cash earmarked for new data centers and all the gear within them. The spending planned by Alphabet Inc, Amazon.com Inc, Meta Platforms Inc and Microsoft Corp, all in pursuit of dominance in the still-nascent market for artificial intelligence (AI) tools, is a boom without a parallel this century. Each of the companies’ estimates for this year is expected either near or surpass their budgets for the past three years combined. They would set a high-watermark for capital spending
China’s top chipmaker has warned that breakaway spending on artificial intelligence (AI) chips is bringing forward years of future demand, raising the risk that some data centers could sit idle. “Companies would love to build 10 years’ worth of data center capacity within one or two years,” Semiconductor Manufacturing International Corp (SMIC, 中芯) cochief executive officer Zhao Haijun (趙海軍) said yesterday on a call with analysts. “As for what exactly these data centers will do, that hasn’t been fully thought through.” Moody’s Ratings projects that AI-related infrastructure investment would exceed US$3 trillion over the next five years, as developers pour eye-watering sums
Bank of America Corp nearly doubled its forecast for the nation’s economic growth this year, adding to a slew of upgrades even after a rip-roaring last year propelled by demand for artificial intelligence (AI). The firm lifted its projection to 8 percent from 4.5 percent on “relentless global demand” for the hardware that Taiwanese companies make, according to a note dated yesterday by analysts including Xiaoqing Pi (皮曉青). Taiwan’s GDP expanded 8.63 percent last year, the fastest pace since 2010. The increase “reflects our sustained optimism over Taiwan’s technology driven expansion and is reinforced by several recent developments,” including a more stable currency,
COLLABORATION: Taiwan and the US could jointly find solutions to weaknesses in supply chain resilience for critical materials, focusing on mining and initial refinement Taiwan is likely to purchase rare earths from the US in the future, and is also in talks with Australia and Canada to strengthen global rare earth supply chain security, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. Taiwan and the US last month concluded the sixth Economic Prosperity Partnership Dialogue, during which both sides signed a joint statement endorsing the principles of the Pax Silica Declaration, pledging to deepen cooperation in areas including critical minerals. At the time, Kung said the two sides would establish working groups to advance cooperation in areas including artificial intelligence, digital infrastructure, critical materials and
RSS