Private equity firm Scepter Partners has made a $6.88 per share takeover bid for Santos, sending its share price soaring 15%. The all-cash bid, at a 24% premium to the pre-bid price, values the business at $7.1bn and was swiftly rejected by Santos’s board. It is a reminder that, although it is deeply wounded, there is value here.
Whether it will be realised, however, depends on a program of asset sales which aims to lower a mountainous $9bn of debt. That the bid was swiftly rejected suggests the sales process is on track.