Competition looms for Santos in $474m Delhi deal -

CONFUSED messages from various funds management arms of Westpac have raised the prospect that Santos may have competition in its deal to buy Delhi Petroleum for $474 million.
In a previously announced and agreed deal between Santos and Westpac Funds Management, Santos was to move from 63 per cent to 85 per cent of the Cooper Basin oil and gas fields of central Australia.
The deal involved Santos buying all the equity in the Delhi group of companies and the transfer to Santos of the associated ASX-listed Floating Interest Energy LinkeD Securities (FIELDS), issued by the Australian Onshore Energy Fund.
Both WFM — it has 45 per cent of the Delhi equity — and the previously unsighted Westpac Resources and Infrastructure — it has recently moved to 55 per cent of the equity in Delhi — have now told Santos they have both received an unsolicited offer in relation to the Delhi transaction from a "third party" and that they are evaluating the offer.
WRI went on to say the unsolicited offer could return more value to holders of the FIELDS than the $83.25 a unit implied by the Santos offer. But, just to make the confusion complete, WFM said it considered the offer was an "incomplete proposal or negotiation".
Santos secured an undisclosed break fee in its original agreement with WFM, the "responsible entity" for the onshore energy fund. But at a rumoured $8 million, it is not likely to scare off too many.
Among the listed oil and gas groups that might be involved, Oil Search topped the lists.
But analysts said a "ginger" group led by boutique investment Carnegie, Wylie & Company and looking to extract a better offer for the FIELDS from Santos was a possibility. Babcock & Brown was mentioned in the same vein. There was also the suggestion that another arm of Westpac was in the hunt.
The reporter owns Santos shares.