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Santos makes $924m bid for Eastern Star Gas

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Santos (ASX: STO) has made a $924 million takeover offer for Eastern Star Gas (ASX: ESG) for the 80% of the company it does not already own.

The acquisition of Eastern Star will be conducted via a recommended Scheme of Arrangement under which Eastern Star shareholders will receive 0.06803 Santos shares for every 1 Eastern Star share held.

Based on Santos’ share price of A$12.87, the offer is valued at $0.87 per Eastern Star share.  Eastern Star previously traded at $0.59 but jumped to $0.845 this morning.

The directors of Eastern Star unanimously recommend that shareholders vote in favour of the scheme and have each stated that they intend to vote the shares they control in favour.

Santos said it would subsequently sell a 20% working level interest in Eastern Star's permits in the Gunnedah Basin, northern New South Wales, for A$284 million to TRUenergy Holdings Pty Ltd.

Quick facts: Santos Ltd

Price: 5.76 AUD

ASX:STO
Market: ASX
Market Cap: $12 billion
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