The marriage between Woodside (ASX:WDS)
and Santos (ASX:STO)
was called off just before midday on Wednesday, as Woodside announced that its much-discussed $A70 billion hookup with Santos was no longer happening.
In fact, the Woodside statement made it clear that the Santos link-up was not ideal. Woodside emphasized in its concise statement that it saw no value in a merger with Santos for its shareholders.
"Woodside has ceased discussions regarding a potential merger with Santos Ltd.
"As a global energy company, Woodside continuously assesses a range of organic and inorganic growth opportunities.
Woodside CEO Meg O’Neill emphasized that thorough due diligence is conducted for every opportunity assessed, and Woodside will only pursue transactions that are value accretive for its shareholders.
“We continue to be disciplined in our approach to mergers and acquisitions and capital management to create and deliver value for shareholders. While the discussions with Santos did not result in a transaction, Woodside considers that the global LNG sector provides significant potential for value creation.
“Woodside’s world-class global portfolio, growth pipeline, and strong balance sheet underpin our attractive investment proposition for Australian and global investors.”
Effectively, Woodside stated that it saw no value in a deal with Santos, potentially isolating the Adelaide company, particularly with South Australian legislation effectively blocking any bid that would see Santos leave Adelaide.
Santos shares had risen 0.9% before the news to $7.94, while Woodside shares were up 1% to $32.61, both reacting to the overnight rise in world oil prices.