QGC’s board of directors on Tuesday unanimously rejected Santos’ $606 million takeover offer, describing its offer price of $1.26 per share as “opportunistic and patently inadequate”.
The Queensland-based company said its share price had risen 84% in the nine months leading up to Santos’ bid and its share price was trading above the offer price, closing at $1.45 on Monday.
But Santos yesterday called on QGC to provide valuation benchmarks to support such claims.
“Santos encourages QGC’s board to unambiguously provide an objective and reasoned view on value, including outlining all reasonable supporting assumptions on which the view is based, so that all QGC shareholders will have sufficient information to determine the merits of Santos’ cash offer,” it said.
“Accordingly, Santos would expect QGC’s target’s statement to contain a detailed and credible valuation report to support any of the board’s claims in relation to value.”
Santos said its $1.26 cash offer represents a 24% premium to QGC’s closing share price on October 3, the day the offer was made and a 47% premium to QGC’s three-month volume weighted average price to that date.
It said QGC’s references to a premium to QGC’s closing price on October 4 are irrelevant, given Santos’ significant on-market purchases on that date.
Santos’ offer price is also double the 63c price at which QGC recently raised capital, it said.
Meanwhile, QGC is not sitting on its hands.
Proceeding with the ambitious plans for rapid development that did much to catch Santos’ interest, QGC today announced it had applied to the Queensland Government for a licence to build a 152km high-pressure gas pipeline from its Undulla Nose acreage to Wallumbilla.
The Wallumbilla hub connects pipelines that supply gas throughout the eastern and southern markets, including Gladstone, QGC said.
“QGC’s proposed pipeline will create gas transport and storage infrastructure and more importantly, represents another pathway for QGC to enter new markets,” managing director Richard Cottee said.
The proposed Wallumbilla pipeline would give QGC the advantage of paying just one carriage price tariff to access the Gladstone, Moomba, Adelaide and Brisbane markets and just two carriage price tariffs to access the Mount Isa and Sydney markets.
