Two of Australia's biggest energy suppliers Santos (ASX:STO)
and Oil Search (ASX:OSH)
reached an agreement on merger ratio via a revised proposal from Santos.
Oil Search shareholders will receive 0.6275 new Santos shares for each Oil Search share held at a share price of $4.29. Following approval, Oil Search shareholders will own approximately 38.5 per cent and Santos 61.5 per cent.
The new offer increases the premium from 12 per cent to 19.7 per cent, according to Oil Search.
Santos chief executive officer Kevin Gallagher said, “it represents a compelling combination of two industry leaders to create an unrivalled regional champion of size and scale with a unique diversified portfolio of long-life, low-cost oil and gas assets."
He continues, “the revised merger proposal represents an extremely attractive opportunity to deliver compelling value accretion to both Santos and Oil Search shareholders.”
Santos and Oil Search have committed to conduct due diligence, subject to confidentiality arrangements over four weeks.
Shares in Santos (ASX:STO)
are trading 1.1 per cent higher at $6.52.