June 16 (Reuters) - Australian oil and gas producer

Santos said on Monday it intended to support an $18.7

billion takeover bid from an international consortium led by Abu

Dhabi's National Oil Company (ADNOC).

ADNOC, through its investment arm XRG, with Abu Dhabi

Development Holding Company (ADQ) and private equity firm

Carlyle has offered $5.76 (A$8.89) per Santos share, which was a

28% premium to the Australian company's close on Friday.

The takeover bid emerged as oil prices reached multi-week

highs as Israel and Iran traded air strikes, sparking concerns

oil exports from the Middle East could be widely disrupted.

The offer follows two previous proposals made by the

consortium in March at $5.04 and $5.42 per share that were not

made public.

"The Santos Board confirms that, subject to reaching

agreement on acceptable terms of a binding scheme implementation

agreement, it intends to unanimously recommend that Santos

Shareholders vote in favour of the potential transaction, in the

absence of a superior proposal," it added.

The XRG consortium said it was negotiating to carry out due

diligence with Santos on an exclusive basis before formalising

the offer which would need at least 75% support from Santos

investors.

"The proposed transaction is aligned with XRG's strategy and

ambition to build a leading integrated global gas and LNG

business," it said in a statement.

Santos said the deal required approval from Australia's

Foreign Investment Review Board (FIRB), Australian Securities

and Investments Commission (ASIC), National Offshore Petroleum

Titles Administrator, PNG Securities Commission, PNG Independent

Consumer and Competition Commission and Committee on Foreign

Investment in the United States (CIFIUS).

MST Marquee senior energy analyst Saul Kavonic said FIRB

approval "may be a major risk to the deal" as Santos controls

significant critical energy infrastructure in Australia.

The deal follows talks last year between Santos and its

bigger Australian rival Woodside to create a possible A$80

billion oil and gas giant, but Santos walked away saying it

would look for other ways to bolster its value.

Santos said in February its underlying annual profit fell

nearly 16% in 2024 and the company cut its dividend by 41%.

While Santos has been a takeover target over the past

several years, Kavonic said that a competing bid "is very

unlikely as only ADNOC may be willing to pay such a premium to

realise their global LNG ambitions."