Australia's Santos gets $10.4 billion bid from Harbour; investors may want more

USA investment fund Harbour Energy formalised its $10.36 billion bid for Australia's Santos Ltd on Thursday but failed to sweeten its offer, dashing hopes of a higher price and sending the oil and gas producer's shares lower.

The bid, which would be the biggest takeover of an Australian oil and gas producer if successful, values the gas producer at $4.98 per share and follows four unsolicited approaches from Harbour.

The price is the same as Harbour's offer lodged in early April, despite oil prices increasing stongly since then.

Santos said there was "no certainty" that the proposal from the private United States firm would result in the takeover going ahead.

Santos advised shareholder on Thursday to take no action in relation to the offer while its directors consider the revised proposal, adding it would update shareholders "accordingly".

"There is no certainty that the Revised Harbour Proposal will result in an offer for Santos that is capable of being considered by shareholders".

Santos revealed Thursday it had received a binding, conditional proposal from Harbour which followed five weeks of due diligence since the USA company tabled its initial non-binding proposal. The deal will also have to be signed off by the the Foreign Investment Review Board.

Santos in February posted a 21% rise in full year revenue of $3.17 billion.