Santos shareholders need to consider if Scepter is another PetroSaudi

by Ganesh Sahathevan


Santos Ltd has been made an offer it can refuse by something called the Scepter Syndicate.

Media reports  says of Scepter:

Scepter described itself as a “syndicate of ultra-high-net-worth industrialists and sovereign wealth funds with offices in New York and representative offices in London and Beijing’’.

Its members include United Arab Emirates royalty and businessman Sheikh Juma al Maktoum, Brunei’s Prince Abdul Ali Yil Kabier and businessman Rayo Withanage, who is of Sri Lankan and Portuguese descent.

The company is being represented locally by corporate adviser Ian Smith from the high powered lobbying firm Bespoke Approach. Bespoke has previously worked for Santos.




Scepter sounds too much like another high-flying Middle East oil rich royal family company called PetroSaudi, which as it turned out, did not really have very much in funds at all. As readers will note from the links provided above and the story below, Messrs Kabier and Withanage are not exactly high ranking royals. There is some doubt as to the nature and standing of  Mr Withanage's "World Zakat Fund" and  "Royal islamic Council". 

Proof of funding ought to be provided immediately for this offer to be taken seriously.

END

Brunei prince firm's US$3.4bil bid for Kerzner empire

Investment firm says hospitality, real estate assets have significant potential in Asia

KUALA LUMPUR: Investment firm BMB said yesterday it was seeking to buy Bahamas-based resort chain Kerzner International for US$3.4bil, seeing strong prospects for Kerzner in Dubai and Asia.

BMB, which was founded in 2004 by a Brunei prince and Fiji-born Rayo Salahadin Withanage and manages wealth for Middle Eastern and Asian investors, has made the offer through its subsidiary BMB Advisors Malaysia.

In a statement, BMB said it was likely to dispose with the casino assets of Kerzner, which was set up by South African hotel and gambling entrepreneur Sol Kerzner but is saddled with debt.

“BMB believes that the hospitality and real estate assets within Kerzner International have significant potential particularly in Asia,” it said.

“BMB is highly supportive of Dubai, the location of the latest Atlantis and one of the largest shareholders in Kerzner International.”

Kerzner International built Atlantis in Dubai (pic) and in the Bahamas. BMB offered to pay as much as US$4bil for Kerzner. — Reuters

Kerzner’s flagship resort is Atlantis Paradise Island in the Bahamas, on which it has modelled a similar resort in Dubai.

“The offer is being made via one of BMB’s subsidiaries but is on behalf of the group’s clients, who are based globally,” the statement added.

BMB Advisors unit sent a letter on Oct 11 to Kerzner, offering to pay US$3.4bil to US$4bil for his Bahamas-based company, according to a copy obtained byBloomberg News.

BMB clients in Malaysia are putting up cash for the bid, Withanage said in a telephone interview from New York. They are attracted by the Atlantis properties, he said.

“We see this as a very powerful brand,” Withanage, 32, said. “If there’s going to be another Atlantis, it’s going to be in Asia.”

Kerzner International also owns One & Only resorts in locales from the Maldives to Mauritius. The company was taken private in 2006 for US$3.2bil, plus debt, by a group led by Kerzner himself.

He partnered with Dubai World’s Istithmar PJSC, Goldman Sachs Group Inc’s Whitehall Street Global Real Estate Ltd Partnership 2005, Colony Capital LLC, Providence Equity Partners Inc and Related Cos. Kerzner spokeswoman Jennifer Glaisek didn’t return telephone calls or e-mails about the bid.

BMB was founded by Withanage and Brunei’s Prince Abdul Ali ‘Yil-Kabier, a nephew of the Sultan of Brunei, in 2004, Withanage said. The pair play on a polo team together.

BMB is a “family office,” managing money for wealthy families in Brunei, Malaysia and the Persian Gulf, Withanage said.

It is based in the Cayman Islands and has offices in New York, London, Kuala Lumpur and Beijing, he said. — Agencies

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Tim Treadgold

Contributor



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FORBES ASIA 10/22/2015 @ 6:05AM 348 views

Oil's Royal Families Chase LNG Exposure In A $5 Billion Bid For Australia's Santos

Oil is not everyone’s favorite investment but it is for people who know it, and no-one knows oil better than the Sultan of Brunei or the royal family of the United Arab Emirates.

Together, plus a number of other members of the Middle East’s “oil royalty”, they have teamed up to launched a $5.1 billion bid for the troubled Australian oil and has company, Santos.

Heavily sold down over the past 12-months Santos is a leading player in the rapidly-emerging business of liquefied natural gas and like all oil and gas companies it has been buffeted by the oil-price collapse.

The problems at Santos go beyond exposure to commodity prices. It is also the owner of legacy oil assets in central Australia which have been reduced to marginal profitability and has opted to use low-value coal-seam methane as fuel for its newest LNG venture, the Gladstone LNG project in the State of Queensland.

Down 70% But Now A Target

Criticism of the $18 billion Gladstone project, in which Santos has a 30% stake, has alarmed investors over the past 12-months, leading at one stage to a 70% fall in the company’s share price as it plunged from $9.45 to $2.85, costing the chief executive, David Knox, his job.

Over the past month Santos has seen a slow recovery in its share price thanks to growing confidence in the Gladstone LNG project being an engineering success, if not yet a financial success.

Proof that it works as promised came late last week when the first cargo of LNG sailed for customers in Asia, giving management at Santos a brief opportunity to smile, along with the other shareholders in the project, including Malaysia’s Petronas and Total of France, each with a 27.5% stake, and Korea’s Kogas with 15%.

Four Days To Celebrate

But as fate would have it for Santos management their celebrations to mark the end of construction lasted exactly four days because the super-rich Middle East families, operating through a Bermuda-based fund manager, Sceptre Partners, delivered their takeover bid on Tuesday.

Santos kept quiet about the bid until earlier today when the board reported, and rejected it, in the same statement saying the offer price of $4.95 cash per Santos share was opportunistic and did not reflect the company’s underlying asset value.

Investors seem to agree. After an initial flurry of interest the Santos share price failed to reached the Sceptre offer, closing on the Australian stock exchange earlier today at $4.55.

Ellice-Flint Returns

Having kicked Santos into play it is up to Sceptre and its super-rich clients to decide what to do next with one of their key advisers, John Ellice-Flint likely to play a key role given his position as a former chief executive of Santos.

Having Ellice-Flint on board indicates that Sceptre’s management team, which is led by former members of the fund manager and advisory firm, Blackstone, are aware of the local political pressures that have always influenced Santos thanks to its close ties to the State Government of South Australia where Santos was created 61 years ago.

Offering more cash for its target should not be a problem with the Middle East families being represented by Sceptre having a combined net worth estimated to exceed $100 billion, and with the bulk of their wealth associated with oil.

Buying LNG, Not Selling

What is interesting with the move on Santos is that the oil families are proposing to buy a business which is heavily exposed to LNG, a commodity that some people reckon is in gross over-supply and better suited to short-selling than buying.

As well as its 30% stake in the Gladstone LNG project Santos has a 13.5% interest an Exxon Mobil operated LNG project in Papua New Guinea, and an 11.5% interest in the Bayu-Undan LNG project in Australia’s Northern Territory operated by ConocoPhillips.

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