The Oil Search Ltd (ASX: OSH) share price has jumped well into the green this morning.
The jump comes after it received a change of control proposal that was confirmed in an announcement today.
Here are the details.
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Oil Search rejects takeover offer
The Oil Search share price has had a choppy start to the week.
Its share price fell on Monday following the sudden resignation of its chief executive on Monday and amid volatile oil prices.
Today's announcement confirms that on 25 June, Australian energy giant Santos Ltd (ASX: STO) submitted a "confidential, non-binding indicative all-scrip merger proposal to the Oil Search Board".
Santos confirmed in an announcement today that the offer implied a transaction price of $4.25 per share "based on Santos' closing price on 24 June 2021".
The offer, therefore, represents a 12.3% premium to Oil Search's closing share price on that day.
However, Oil Search "noted that the proposal did not offer appropriate value for Oil Search shareholders or a basis on which discussions could be progressed".
As such, Oil Search rejected the takeover offer under the terms stipulated by Santos at this time.
Nonetheless, Santos has put forward the "prospect of a genuine merger". To this, Oil Search has stated:
The strategic rationale for a merger is clear and offers superior value to Oil Search shareholders rather than continuing on a standalone basis.
It's clear there will be more on this story in the future.
Investors have rewarded the company on its decision, pushing the Oil Search share price north 5.72% into the green.
Oil Search shares are now changing hands at $3.88 apiece, 74 cents off the 52-week high of $4.62.
Oil Search share price snapshot
The Oil Search share price has had a choppy year to date, posting a return of 4.1% since January 1. This has extended the previous 12 months' return of ~28%.
Whilst Oil Search shares have lagged the S&P/ASX 200 Index (ASX: XJO)'s return so far in 2021, it has beaten the broad index's return of ~21% over the past year.
At the time of writing, Oil Search has a market capitalisation of $7.6 billion.
