ASX 200 rises, Santos and Oil Search merge

Santos and Oil Search merging was a highlight within the ASX 200.

| More on:
bull market encapsulated by bull running up a rising stock market price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 Index (ASX: XJO) rose by 0.5% today to 7,407 points.

Here are some of the highlights from the ASX:

Santos Ltd (ASX: STO) and Oil Search Ltd (ASX: OSH)

The two oil businesses have agreed to combine to create a "regional champion of scale with a diversified portfolio of long-life and low-cost oil and gas assets." They have entered into a definitive agreement to merge.

Oil Search shareholders will receive 0.6275 new Santos shares for each Oil Search share held.

Santos expects the merger will unlock pre-tax synergies of between US$90 million to US$115 million per annum (excluding integration and other one-off costs), which is expected to benefit both sets of shareholders.

This combined ASX 200 business will be led by the Santos managing director and CEO Kevin Gallagher, who said:

Santos and Oil Search will be stronger together and will have increased scale and capacity to drive a combined disciplined, low-cost operating model and unrivalled growth opportunities over the next decade.

The merger will create a company with a balance sheet and strong cashflows necessary to successfully navigate the transition to a lower carbon future with the combination of Santos' leading CCS capability combining with Oil Search's ESG programs in PNG and Alaska to provide a strong foundation.

Upon completion of the merger, Oil Search shareholders will own approximately 38.5% of the merged company and Santos shareholders will own approximately 61.5%.

AMA Group Ltd (ASX: AMA)

AMA announced today that it has launched a $150 million capital rising. That was split between a $100 million fully underwritten accelerated 1 for 2.80 pro rata non-renounceable entitlement offer and a $50 million fully underwritten senior unsecured convertible notes due in 2027.

The business decided to do this after its capital restructure review.

This raised capital is expected to lead to a number of benefits.

There will be enhanced balance sheet flexibility and funding diversification. AMA will also have a longer duration of debt, with average maturity increased to April 2025. AMA said this raising would give it enhanced liquidity to navigate short-term disruptions associated with COVID-19.

It also said that the raising would give a platform for the business to execute on its own growth strategy.

AMA Group CEO Carl Bizon said:

This capital raising will provide us with funding and flexibility as we face the headwinds presented by COVID-19 and give us the firepower to execute our strategy. AMA Group is uniquely positioned to respond as restrictions lift, and I look forward to us realising the value inherent in the group.

Iress Ltd (ASX: IRE)

The Iress share price fell 3.5% after giving the market an update about its ongoing discussions with EQT. Investors may remember that the ASX 200 fintech received a confidential, non-binding and indicative proposal from funds represented by EQT Fund Management.

At the time of the offer, the two parties agreed to a period of 30 days exclusive access to undertake its due diligence.

Discussions with EQT are progressing and Iress has agreed to grant an additional 10 days of exclusivity to EQT on the same terms.

The Iress board said it will update shareholders and the markets in due course.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

a sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile telephone out front of what appears to be an on site work shed.
Resources Shares

Down 14% in 2024, why is the BHP share price sliding again today?

ASX 200 investors are bidding down the BHP share price on Wednesday.

Read more »

A mining employee in a white hard hat cheers with fists pumped as the Hot Chili share price rises higher today
Resources Shares

These ASX 200 mining stocks could rise 40% to 50%

Analysts think these miners are dirt cheap at current levels.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Fortescue share price leaps 5% as electric machinery makes a milestone

Fortescue is charging ahead with its electric mining ambitions.

Read more »

rising mining asx share price represented by happy woman miner in hard hat
Resources Shares

Why the BHP share price crushed the benchmark this week

BHP shareholders enjoyed a rewarding week.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Dividend Investing

Here is the profit forecast to 2026 for BHP shares

Let’s unearth how much profit this miner could make.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

Is the worst of the selling now over for ASX iron ore shares?

ASX iron ore giants like BHP, Rio Tinto and Fortescue rebounded this week after falling hard in 2024.

Read more »

Three satisfied miners with their arms crossed looking at the camera proudly
Resources Shares

Why are ASX 200 mining shares smashing the benchmark on Wednesday?

Rio Tinto, BHP and Fortescue shares are all charging higher today.

Read more »

Two miners standing together.
Resources Shares

Why is the South32 share price getting battered today?

ASX 200 investors are bidding down South32 shares today.

Read more »