Middle East Takeover Speculation for Santos Resurfaces

Highlights:

• Renewed Interest: Speculation of Saudi Aramco and Adnoc considering bids for Santos, driven by their global gas asset acquisition strategies.
• Investor Pressure: Investors are pushing for a shake-up due to Santos' underperformance and lack of a clear succession plan for the CEO.
• Asset Sales: Santos is in talks to sell assets, aiming to unlock value and address investor concerns.

Adelaide-based oil and gas producer Santos Limited (ASX: STO) is once again in the spotlight amid renewed takeover speculation from Middle Eastern giants Saudi Aramco and Abu Dhabi National Oil Co (Adnoc).

Market Speculation and Analyst Insights

Reports suggest that both Saudi Aramco and Adnoc are considering bids for Santos. However, market analysts, including MST Marquee’s Saul Kavonic, view a takeover as unlikely but do not entirely dismiss the possibility of international interest. Santos has been under pressure to consider corporate restructuring to boost its lagging share price.

Investor and Market Reactions

Investor sentiment indicates a desire for Santos’ management to explore strategic options due to the company’s underperformance relative to its peers. Katana Asset Management’s Romano Sala Tenna noted that the market sees potential value in Santos’ assets that is not reflected in its current share price.

Ongoing Strategic Moves

Santos is engaging with third parties on potential asset sales, including the Dorado oil and gas field in Western Australia and the Pikka oil project in Alaska. Despite the speculation, analysts believe regulatory hurdles and the complexity of such a deal would make a direct takeover challenging.

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