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In a surprising turn of events, the ASX energy sector experiences mid-week madness as the much-anticipated merger between Australia's energy giants, Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS), takes an unexpected nosedive.
Santos Share Price Takes a Hit
Santos' shares face a substantial blow, defying the positive trend seen across the Australian shares market. With shares plummeting to $7.46, down 5.2%, and hitting a low of 8.6%, Santos finds itself at the epicenter of the damaging fallout.
Woodside's Verdict: Sayonara to Mega-Merger
Woodside Energy's announcement puts an end to the thirteen-day saga, revealing the cessation of discussions regarding the potential merger. The Santos share price, which had previously rallied 15%, now faces a setback after confirmed merger talks on December 7, 2023.
Woodside's CEO Meg O'Neill's Plain Statement
Woodside CEO Meg O'Neill's statement lacks detail on the reasons behind the halted discussions. Emphasizing a disciplined approach to mergers and acquisitions, O'Neill hints at the company's commitment to creating shareholder value. However, the global LNG sector's potential remains a focal point for future endeavors.
Speculations and Industry Expert Reactions
Industry experts express bewilderment at the abrupt end to the merger talks. Pinpointing the price as a potential stumbling block, concerns arise about striking an offer that appeases Santos shareholders, given its depressed P/E ratio of around 9 times earnings.
Santos Shares: What's Next?
With Santos valued at AU$6.78 before the merger talks became public, current uncertainty prevails over the company's future moves. As shares trade at AU$7.49, a significant gap remains between the current price and pre-merger levels.
Awaiting Clarity: Santos' Official Results on February 21
Shareholders anxiously await Santos' official results on February 21, marking a crucial checkpoint. The company's future course of action, potential suitors, and strategic decisions will likely come into focus, providing clarity for investors.
