Oil Search (ASX:OSH) share price falls as boss demands bigger ‘diamond’

Oil Search’s temporary boss is reportedly holding out for more cash from Santos while gunning to hold the job permanently.
The post Oil Search (ASX:OSH) share price falls as boss demands bigger ‘diamond’ appeared first on The Motley Fool Australia. –

The Oil Search Ltd (ASX: OSH) share price is down amid reports the company’s interim CEO wants “more carats in the diamond ring” from Santos Ltd (ASX: STO).

It’s the latest broadside in the merger and acquisition saga involving the two oil companies.

Right now, the Oil Search share price is $3.96, 0.63% lower than its previous closing price.

Interim CEO Peter Fredricson reportedly told The Australian the company saw merit in Santos’ takeover offer, posed to the company late last month, but rejected it as the payout was too small.

Let’s take a closer look.

Quick refresher

Santos submitted a $23 billion confidential takeover offer to Oil Search late last month.

The takeover attempt was made public last week when Oil Search announced it had rejected the proposal.

Santos had offered a $4.25 scrip consideration for each of Oil Search’s shares. That represented a 12.3% premium on the Oil Search share price as of 24 June 2021.

If Santos’ proposal was accepted, Oil Search would have held 37% of the resulting entity.

Oil Search said Santos’ proposal undervalued its shares. The Oil Search share price gained 6.2% after the annoucement it had rejected the offer.

Today’s news of Oil Search

The Oil Search share price is off the pace in early trade with Santos’ rejected proposal in the headlines again.

The Australian has reported Oil Search is willing to discuss a merger between it and Santos if the latter can offer the right price. Fredricson was quoted as saying:

It’s a little bit like someone wants to gets engaged and give you a diamond ring but we gave the diamond ring back and said no thanks. They need to come back with a couple more carats in the diamond ring.

Fredricson also said “the vast majority” of the company’s shareholders want to go ahead with the merger, but Oil Search is holding out for a better deal:

An alignment putting Oil Search and Santos together has huge industrial logic to it. But you’ve got to get an appropriate value allocation because we’ve got shareholders that aren’t shareholders of Santos. And we’ve got to look after their rights.

Fredricson was given the top job at Oil Search last week after Keiran Wulff stepped down unexpectedly. Fredricson told The Australian he wants to keep the company’s biggest office permanently, despite having little experience in gas and oil. He was quoted as saying:

So long as you’ve got the oil and gas expertise within your team, I see no reason why I couldn’t be the long-term CEO of this business.

Oil Search share price snapshot

2021 has been a good year so far for the Oil Search share price.

It is currently 7.55% higher year to date. It has also gained 27% since this time last year.

The company has a market capitalisation of around $8.3 billion, with approximately 2 billion shares outstanding.

The post Oil Search (ASX:OSH) share price falls as boss demands bigger ‘diamond’ appeared first on The Motley Fool Australia.

Should you invest $1,000 in Oil Search right now?

Before you consider Oil Search, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Oil Search wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

5 things to watch on the ASX 200 on Monday

Santos (ASX:STO) share price down amid concerns over bidding war
Oil Search (ASX:OSH) share price on watch — board tipped to fight merger
5 things to watch on the ASX 200 on Friday

Santos (ASX:STO) share price jumps on record quarterly sales

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!