The Abu Dhabi National Oil Company is offering to buy Australian energy giant Santos for $8.89 a share in hard cash. What’s the scam?
The scam is that Santos shares are trading way below the bid price at $7.74, which means investors are doubtful the deal will be done. Usually in a takeover offer, if the bid is cash the share price reflects the offer price.
Not so with Santos. It’s 15% below. And why? Because it will ultimately be the decision of Treasurer Jim Chalmers and this is a highly strategic set of energy assets which Chalmers may deem should remain in Australian control.
Not that it’s contributions to Australia’s tax base are much to write home about. Even when it makes a profit Santos rarely pays tax; nor too much in the way of royalties either. It hasn’t paid any income tax in Australia for eight of the last ten years. It is our third-largest exporter of gas (LNG) with revenues of $9.4B in 2024 and most recently a net profit of $1.9B.
What value will he attribute to the fact that gas is a strategic resource? At some stage, the Government will have to make a decision on what to do with our gas exports as it continues to artificially inflate the price of gas domestically while burning the planet elsewhere.
Will Chalmers meekly accede to the desires of a foreign company and Santos shareholders? Apart from these, the deal has zero benefits for Australia, and that’s who Chalmers works for.
Kim Wingerei is a businessman turned writer and commentator. He is passionate about free speech, human rights, democracy and the politics of change. Originally from Norway, Kim has lived in Australia for 30 years. Author of ‘Why Democracy is Broken – A Blueprint for Change’.