Oil Search (ASX:OSH) share price edges higher on merger update

We take a look at what the oil and gas company announced today?

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 Oil Search Ltd (ASX: OSH) share price is pushing upwards today following a positive update by the energy producer.

At the time of writing, Oil Search shares are up 0.76% to $3.97 apiece. In contrast, the S&P/ASX 200 Index (ASX: XJO) is down 0.28% to 7,220.7 points.

What did Oil Search announce?

In today's statement, Oil Search advised that it has received approval from the Papua New Guinea Securities Commission regarding its merger with Santos Ltd (ASX: STO).

This is just one of the conditions of the merger implementation deed that needed to be satisfied.

However, there are still a few hurdles to overcome. This includes clearance from the Independent Consumer and Competition Commission of Papua New Guinea as well as approval by Oil Search shareholders at the scheme meeting to be held tomorrow.

The Oil Search board unanimously recommends that its shareholders vote in favour of the scheme in the absence of a superior proposal.

In addition, other court approvals and the satisfaction or waivers of certain other customary conditions is required.

Both Oil Search and Santos are hoping to create the largest oil and gas company listed on the ASX. In essence, this would give the super-company a diversified portfolio of long-life and low-cost assets with significant growth options.

The offer consists of Oil Search shareholders receiving 0.6275 new Santos shares for each Oil Search share held. Upon completion, this would give Oil Search shareholders a 38.5% stake in the newly merged entity. Santos shareholders will retain the remaining 61.5% interest.

Oil Search share price summary

Since this time last year, Oil Search shares have gained more than 5%, with year-to-date growth hovering just under 7%. The company's share price has moved sideways for most of 2021, amid uncertainty in the global economic recovery.

Based on today's price, Oil Search commands a market capitalisation of roughly $8.2 billion, and has 2 billion shares outstanding.

Motley Fool contributor Aaron Teboneras 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 Mergers & Acquisitions

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Mergers & Acquisitions

Rio Tinto shares sink 6% on Glencore merger bombshell

The market is reacting negatively to this potential mega-merger.

Read more »

A man stands with his arms crossed in an X shape.
Mergers & Acquisitions

BlueScope shares fall after rejecting 'significantly undervalued' takeover offer

The steel products company has given a firm no.

Read more »

Multiple ASX share investors take on one another in a tug of war in a high rise building.
Mergers & Acquisitions

BlueScope shares jump 20% on takeover news

This steel company is a takeover target. Here's what you need to know.

Read more »

Gold bars and Australian dollar notes.
Gold

ASX gold stock tumbles on big merger news

What did the gold miner announce today? Let's find out.

Read more »

Two hands being shaken symbolising a deal.
Mergers & Acquisitions

Guess which ASX All Ords share is leaping higher today on acquisition news

Investors are piling into this ASX All Ords share following a strategic acquisition.

Read more »

A young female traveller leans over the balcony of her cruise ship room and holds her arms out enjoying the sea air
Mergers & Acquisitions

Flight Centre share price soaring 9% on big acquisition news

Investors are clearly pleased with Flight Centre’s new acquisition. But why?

Read more »

Businesswoman holds hand out to shake.
Mergers & Acquisitions

These two takeover targets are still trading below their potential bid prices

Takeovers can provide windfall gains for investors, if they get in at the right price.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Gold

This ASX 300 gold stock is rocketing 27% amid takeover bidding war

This gold miner has received a new takeover offer.

Read more »