If you're a shareholder in the ASX 200 energy share Oil Search Ltd (ASX: OSH), there was some big news out this morning that you should probably pay attention to.
As investors might know by now, Oil Search received a takeover offer from its fellow ASX 200 oil share Santos Ltd (ASX: STO) earlier this year. After a few bites at the apple, Oil Search finally accepted a takeover offer from Santos back in September. Well, this morning, investors were told that the merger is officially now "effective" after the scheme of arrangement was approved by the National Court of Papua New Guinea. That means that today, 10 December, will be the last day that Oil Search graces the ASX boards.
So if you own OSH shares, what happens now?
What happens to my Oil Search shares now?
Well, if you haven't sold them by the end of today's trading day, here's what happens next. Investors holding Oil Search shares are set to receive 0.6275 Santos shares for every Oil Search share held. So, say an investor owns 10,000 Oil Search shares. Following the completion of this deal, they will instead own 6,275 shares in Santos.
The combined company is set to have a market capitalisation of roughly $22 billion. It will be (in Santos' words), a "regional champion of size and scale" with "pro-forma 2021 production of approximately 117 million barrels of oil equivalent".
Here's some of what Santos CEO Kevin Gallager, had to say this morning:
Santos and Oil Search are stronger together and will have increased scale and capacity to drive a disciplined, low-cost operating model and unrivalled growth opportunities over the next decade…
The merger creates a company with strong and diversified cash flows, providing a platform to deliver shareholder returns and successfully navigate the transition to a lower carbon future.
Officially, the record date for the share transition is 14 December (this Sunday). The implementation date will be 17 December, with the new Santos shares commencing normal ASX trading on 20 December.
The Oil Search share price is currently trading at $4.06 at the time of writing, down 1.93% so far today. What a way to go out!
