Santos Limited (ASX: STO)
Santos Limited: Riding High on Deal Buzz and Project Momentum
Santos Limited (ASX: STO) is making headlines not just for strong numbers, but for a potential takeover that could redefine its future. On 13 June, the company confirmed it had received a non-binding acquisition offer from the XRG Consortium, led by a subsidiary of Abu Dhabi National Oil Company, backed by global players ADQ and Carlyle. It’s the third proposal from XRG in 2025, and this time, Santos is listening. The board has greenlit due diligence access, and if no better offers come forward, shareholders may soon be voting on a transformative deal.
While discussions around the acquisition gain traction, Santos Limited continues to deliver strong results In Q1 2025, the company reported US$465 million in free cash flow from operations, a 9% jump quarter-on-quarter, with production nudging up to 21.9 mmboe. Sales revenue came in at US$1.29 billion, driven by LNG strength and higher domestic gas output, especially from Western Australia and PNG. Despite oil-linked LNG pricing softening slightly, Santos' diversified portfolio kept results steady, and its unit production cost guidance remains solid Its megaprojects are nearly ready to deliver. The Barossa LNG project is 95% complete, aiming for first gas by Q3 2025. Four wells are online, with infrastructure like the FPSO and pipelines nearing final commissioning. Meanwhile, up in Alaska, the Pikka Phase 1 oil project has hit 85% completion, with production flow rates already showing promise averaging 6,900 barrels per day. Strategically anchored in high-demand Asian LNG markets, Santos Limited boasts low-cost operations, a US$35/bbl breakeven, and over 4.8 billion boe in reserves and resources. Whether through a transformative deal or sustained execution, the company is set for a pivotal next chapter.
Tourism Holdings Limited (ASX: THL)
Tourism Holdings Limited: A Global RV Giant Navigating a Pivotal Phase
Tourism Holdings Limited (ASX: THL) holds a leading position in the global RV rental sector, operating extensively across regions including New Zealand, Australia, North America, the UK, and Europe. It operates multiple well-known rental brands, including Maui, Britz, and Apollo, and supports its operations with manufacturing and retail businesses under names like Action Manufacturing and RV Super Centre. Recently, the company received a conditional, unsolicited proposal from a consortium involving BGH Capital and the Trouchet Shareholders, offering to acquire shares at NZ$2.30 each. This came shortly after BGH obtained a 19.99% interest in the company, having purchased shares from ACC, ANZ, and WAM at prices ranging from NZ$2.25 to NZ$2.30. Additionally, THL announced an interim dividend of 2.5 cents per share for FY25 and activated its Dividend Reinvestment Plan at a strike price of NZ$1.7749 with a 2% discount.
Despite market headwinds, THL posted an underlying NPAT of $26.5M (down 33%), statutory NPAT of $25.3M (down 36%), and underlying EBITDA of $113.3M (down 5%). Rental revenue grew 8% to $232M while sale of goods dropped 4% to $206M. The fleet grew 11% to 8,172 vehicles, though RevPARV declined 3% to $29.8k. THL is managing capital prudently, reporting net debt of $477M and an equity ratio of 38.9%. Return on Funds Employed stood at 8.1% overall, with strong 19.0% returns in New Zealand and 27.9% from Action Manufacturing. Looking ahead, initiatives like fleet cost reduction, business model optimisation in North America, and systems consolidation are expected to drive value creation and long-term earnings growth into FY26–FY27 and beyond.
(Source: Company Announcements)
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