Santos Ltd top S&P/ASX200 gainer on Harbour Energy takeover bid

Shares in Santos Ltd (ASX: STO) have rocketed up 21.2% to $6.14 at the time of writing – a 52-week high for the stock and the S&P/ASX 200 top gainer of the day – as news of a $13.53 billion takeover offer from Harbour Energy gains traction with investors.

The Harbour Energy offer values Santos at $6.50 per share and Harbour plans to fund the takeover through a combination of debt and equity, with J.P. Morgan and Morgan Stanley underwriting US$7.75 billion of debt.

Santos last year rejected a US$9.5 billion takeover offer from Harbour, with Harbour also approaching Santos with takeover offers on two other occasions.

Santos produces natural gas for Australian, Indonesian and other Asian markets, with an oil and liquids business in Australia also.

Santos reported a 21% increase in revenue to $3.17 billion and an underlying NPAT of $336 million when it announced its FY17 results in February, with today’s share price almost double its $3.85 price at this time last year.

Harbour Energy says it will “utilise Santos’s core assets and capabilities as a platform for growth in Australia, Asia and the global LNG sector”.

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