Australian energy giant Santos woke up to a market shock on Thursday after Abu Dhabi’s ADNOC-led consortium abruptly pulled the plug on its $18.7 billion takeover bid. The fallout sent Santos shares crashing more than 13%—their steepest drop in over five years.
The deal, once hailed as potentially the largest all-cash corporate buyout in Australian history, collapsed over “commercial terms” that couldn’t be reconciled. Santos revealed it had been prepared to close at $5.626 a share, slightly below the original $5.76 proposal floated in June but adjusted for dividend payouts.
Instead, the XRG consortium walked away midweek, citing a cocktail of factors that shifted its assessment. The withdrawal left Santos trading at A$6.61 in early hours, dragging the stock to its weakest point since June and souring sentiment across the ASX200, which slipped nearly 1%.
The breakdown is the third time in seven years that Santos has seen a suitor walk away. Earlier courtships with Harbour Energy in 2018 and merger talks with Woodside Energy also ended without vows, stoking investor frustration over missed opportunities.
Analysts were blunt. “Each failed attempt chips away at confidence,” one remarked, noting that patience with Santos’ leadership may be wearing thin.
Still, Santos’ board struck a defiant note. Chair Keith Spence insisted the company’s strategy, leadership, and global growth pipeline remain intact, promising long-term value for shareholders despite the setback.
Not everyone was convinced. Investment bank Jarden promptly downgraded Santos from overweight to underweight, slicing its price target by 16% to A$7.05. The bank warned that shareholders may demand answers on whether negotiation tactics cost them a deal.
For now, Santos remains in limbo: a company too large to ignore, but seemingly too complicated to secure. Investors will be watching whether management can finally deliver value—or whether yet another bidder eventually circles back.
