My initial response to the announcement is: SH*T! The more I read, the more I like the deal. Could be similar to BPT's acquisition of Lattice.
Firstly, no CR and the debt level looks ok - "Proforma net debt of $4.6 billion ($3.0 billion excluding PNG LNG project finance)" and "~40% of Santos’ debt outstanding pre-Quadrant acquisition (as at 30 June 2018) is the non-recourse PNG LNG project finance facility which is repaid from project cash flows"
Secondly, EPS accretive in the first year, up 5% with average poo at $65. What if poo at $75 average? - "~17% expected free cash flow per share accretion in 2019". With the same payout ratio, the divident will increase by 17%.
Thirdly, the reserve and potential for new discoveries.
Is acquiring Quadrant a good idea?, page-39
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