This has driven up the value of Harbour’s $US4.98 bid...

This has driven up the value of Harbour’s $US4.98 bid significantly from a $6.50 a share, $13.5 billion, offer to a valuation of $6.67 a share as of Wednesday, adding more than $350 million to its initial offer.
Despite exchange gains, Citi analyst James Byrne expects Harbour will still have to up its offer to $7 a share to account for the recent increases in the Australian dollar oil price.
“Because the market’s expectation of long-term oil prices has increased, the market’s intrinsic value for Santos has theoretically increased and Harbour would need to compensate shareholders,” he said.
He said this was justified as every $US5 increase in the oil price assumes an additional 42 cents on top of Santos’s share price.
Analysts expect that for ever $US5 increase in the oil price, Santos's share increase by around 42 cents.
Photo: Bloomberg
This forecast, at current exchange rates, would see Harbour paying around $14.5 billion for Santos, one billion dollars above its April offer and $1.5 billion above Santos’s current market cap.
Mr Lennox said a slightly higher bid isn’t out of the realms of possibility.
“We’ve valued Santos at a bit over $7, so given the outlook for oil is a little brighter you’d think Harbour would sweeten the deal by 50 cents or so,” he said.
Mr Byrne warned if Harbour doesn’t come back with a higher offer the deal may collapse.

GOOD, LET IT COLLAPSE!!!
BRENT IS AT $79.20 THIS MORNING
When they first made the offer on the 3rd of April brent was $67.50, well now its $79.20.

SO, THE OFFER NEEDS TO BE AROUND $7.50