stos new bid

STO want to buy the Undulla Nose coal seam gas assets in south-east Queensland for $1.30 and they reckon whats left of QGC is worth 50 cents.

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Under a proposal announced by Santos today, Santos would require Queensland Gas
Company Limited (“QGC”) to establish a new ASX-listed company to boost the development
of Queensland’s coal seam gas industry.
Under the proposal, Santos would pay QGC shareholders $1.30 per share in cash for all of
their shares in return for the acquisition of QGC’s Undulla Nose coal seam gas assets in
south-east Queensland.
In addition, QGC shareholders would also receive shares on a one-for-one basis in a ‘New
QGC’ that would own a number of QGC’s existing highly prospective tenements. The ‘New
QGC’, led by the current QGC board and management team, would focus on immediately
commercialising these coal seam gas assets.
Santos believes that the indicative value of the ‘New QGC’ would be in the order of $0.50 per
share, which together with the $1.30 cash consideration per share implies total consideration
of around $1.80 per share. This is above the midpoint of the “per share” control valuation
determined by QGC’s independent expert in the AGL Energy Explanatory Memorandum
released today. If Santos and QGC proceed to implement the proposal, Santos expects that
a further independent expert’s report would be commissioned to provide QGC shareholders
with both a valuation range for the ‘New QGC’ shares and the entire consideration payable
under the proposal.
Santos believes that its proposal is superior to the current AGL Energy proposal and, unlike
that proposal, gives QGC shareholders an opportunity to exchange all of their shares at an
attractive price. It would deliver substantially more cash to QGC shareholders than under the
AGL Energy proposal and also provides QGC shareholders with continued participation in
the future of ‘New QGC’.