Santos extends exclusivity for $18.7 billion ADNOC-led offer, profit drops | Reuters

Santos extends exclusivity for $18.7 billion ADNOC-led offer, profit drops | Reuters

Australian gas producer Santos (STO.AX), opens new tab on Monday agreed to further extend the exclusivity period for an $18.7 billion takeover bid from a group led by Abu Dhabi National Oil Co (ADNOC), and reported a better-than-feared 22% drop in first-half profit.

Its shares rose 1% after the company extended the due diligence period to September 19 to give the consortium led by ADNOC's investment arm XRG more time to finalise a binding offer.

The consortium last week flagged it would need extra time on top of its due diligence period to seek internal approvals for a bid.

Santos said "customary protections" would be included in any negotiations to protect the company's investors if the deal is further dragged out once an agreement is signed.

It declined to give any details on those inclusions. Large corporate buyouts typically involve break fees or "ticking fees" where the buyer may have to stump up more if there are delays.

"We're pleased with the progress we've made. We've worked well with the folks from XRG over the last few weeks," Santos Chief Executive Kevin Gallagher told analysts on a conference call.

"Given that the consortium has again confirmed that it's found nothing in due diligence that would make it consider withdrawing its offer, we've agreed to extend the process deed."

Analysts said the shares would likely be supported on Monday by confirmation the deal was still progressing despite the delays.

The deadline for the exclusive talks between Santos and the consortium expired last Friday. Santos can engage with a bidder if a higher offer is made, but is prevented from talks with any parties who match the XRG offer.

The proposed offer requires approval from regulators in Australia, Papua New Guinea, and the U.S. given Santos holds assets in each of those jurisdictions.

Gallagher said Santos could not predict when regulatory approval would be finalised or when the company's shareholders could be asked to vote on the deal.

Santos reported its first-half underlying earnings fell to $508 million from $654 million a year earlier, hurt by weaker realised prices for its liquefied natural gas (LNG) and oil. The result was 3% above Visible Alpha forecast consensus.

While its shares rose to A$7.81 per share on Monday, they remain more than a dollar below the consortium's proposed offer of A$8.89 apiece. The gain outpaced a 0.1% rise in the broader S&P/ASX200 (.AXJO), opens new tab index.

Santos said oil production from its Pikka project in Alaska is now expected to begin in the first quarter of 2026, brought forward from the first half of that year.

#AbuDhabi's TAQA to use $1.2 billion GS Inima deal as launchpad for global water expansion | Reuters

Abu Dhabi's TAQA to use $1.2 billion GS Inima deal as launchpad for global water expansion | Reuters

Abu Dhabi's TAQA (TAQA.AD), opens new tab plans to turn GS Inima into its main vehicle to pursue an international expansion strategy in the water sector, its CEO told Reuters on Monday, a day after the state-owned utility acquired the Spanish company for $1.2 billion.

"It will be our engine for growth internationally when it comes to desal (desalination) and wastewater and municipal water," TAQA's chief executive Jasim Husain Thabet said in an interview.

The Emirati company announced on Sunday it had reached an agreement to acquire 100% of Madrid-based GS Inima from South Korea's GS Engineering & Construction (006360.KS), opens new tab.

The deal, which is expected to close next year, is the largest M&A transaction in water outside of the United Arab Emirates (UAE) for TAQA, Thabet said.

"(The deal) sits really in the sweet spot of our growth strategy and transformation", he said, as it will allow the Abu Dhabi company to enter eight new markets, including Brazil and Mexico.

GS Inima operates around 50 active projects, including around 30 long-term public-private partnerships that provide steady fees under inflation-adjustment mechanisms.

TAQA, which said it aims to spend around $20 billion between 2023 and 2030 on organic and inorganic growth, has in recent months committed to investing billions of dollars in various large-scale water projects in countries such as Morocco and Uzbekistan.

The acquisition will add 171 million imperial gallons per day (MIGD) of desalination capacity to its 1,250 MIGD portfolio.

It will also support TAQA's target to source two-thirds of its water desalination capacity from reverse osmosis technology by 2030 from around 40% at present, and will boost wastewater capacity with an additional 2.6 million cubic meters per day.

Thabet said that the transaction will be financed using TAQA's funds.

Most Gulf markets ease as US rate cut excitement fades | Reuters

Most Gulf markets ease as US rate cut excitement fades | Reuters

Most stock markets in the Gulf ended lower on Monday mirroring global declines as excitement over a potential U.S. interest rate cut in September faded.

Federal Reserve Chair Jerome Powell on Friday signalled a possible rate cut at the Fed's meeting next month, saying that risks to the job market were rising but inflation remained a threat, and that a decision wasn't set in stone.

Saudi Arabia's benchmark index (.TASI), opens new tab gave up early gains to edge 0.1% lower, hit by a 0.8% fall in the country's biggest lender Saudi National Bank (1180.SE), opens new tab.

Elsewhere, oil giant Saudi Aramco (2222.SE), opens new tab dropped 0.3%.

Powell's dovish nod improved sentiment, with markets wagering an 87% chance of a quarter-point cut on Sept. 17, as per CME's FedWatch tool and 53.3 basis points of cumulative reductions by year-end, according to LSEG.

The Fed's stance holds significant implications for Gulf economies, where most currencies are pegged to the U.S. dollar, making it an anchor for regional monetary stability.

The prospect of a rate cut next month could still support the market, said Osama Al Saifi, Managing Director for MENA at Traze.com. "Meanwhile, oil prices remain a risk; despite the rebound, the overall trend is still pointing to the downside, and geopolitical developments will likely influence the market's next move."

Dubai's main share index (.DFMGI), opens new tab gained 0.2%, with blue-chip developer Emaar Properties (EMAR.DU), opens new tab rising 1%.

In Abu Dhabi, the index (.FTFADGI), opens new tab ended flat.

The Qatari index (.QSI), opens new tab lost 0.3%, weighed down by a 1.2% fall in the Gulf's biggest lender Qatar National Bank (QNBK.QA), opens new tab.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab was flat.

Egypt's central bank is likely to cut its key interest rates by 100 basis points on Thursday to support growth as inflation cools, a Reuters poll showed.