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Woodside was sole bidder, no investors for Driftwood

project

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Australian energy firm provided bridge loan with offer

By Curtis Williams

HOUSTON, Aug 9 (Reuters) -

Woodside Energy ( WDS ) which

agreed last month

to buy Tellurian, the developer of a

fully-permitted U.S. liquefied natural gas (LNG) project, for

$1.2 billion including debt is unlikely to face a rival bid,

people close the deal said.

While taking over the troubled Driftwood project would

help

Woodside's ambition

to become one of the world's largest independent LNG

producers, the Australian company had no competition, the people

said, despite Tellurian's eight-year-long effort to recruit

investors to the project that it had claimed to have invested

$1.5 billion.

Woodside's offer came with a bridging loan of up to $230

million that allows construction of the 27.6 million metric ton

per annum facility in Louisiana to proceed.

A Tellurian spokesperson said the LNG developer has not yet

scheduled a shareholder vote on the Woodside deal, which is not

expected to close until late this year. Its board has endorsed

the deal, agreed to not solicit other offers, and to pay a $36

million termination fee in the event a higher bid upends the

current offer.

The transaction includes the $900 million cash purchase

of outstanding Tellurian common stock at $1 per share, which

Woodside said represented more than a 75% premium to Tellurian's

last closing price before the deal.

Tellurian's second largest shareholder, Chatterjee

Management Company, which owns 5.3% of Tellurian, is not happy

with the sale price, but expects to support the Woodside deal

barring a better offer.

"If there is a better offer for the company, they can and

will show up, before the deal is presented to the shareholders,"

said Chairman Purnendu Chatterjee.

Chaterjee Management bought most of its shares in Tellurian

between Dec. 13 and Dec. 22 when the stock traded between 65 and

84 cents per share.

Hedge fund Magnetar Capital Partners this week disclosed it

had bought 46.1 million shares of Tellurian in Julyat weighted

average prices between 91 cents and 94 cents apiece.

The company, which holds a 5.16% stake in Tellurian, did not

comment on the purchases. But in a securities filing, it

described the stock purchases in the days after Woodside's bid

as designed to profit from the spread between the share price

and Woodside's $1 share offer.

Tellurian shares last traded at under 91 cents on Thursday.

Former Tellurian Chairman Charif Souki this year had floated

putting together an offer for the company after his departure at

the end of 2023. None has materialized and he did not reply to

requests for comment through his attorney or the company.

Prior to Woodside's offer, there was no serious interest

expressed in an equity investment in the Driftwood project or

Tellurian, two people familiar with the process told Reuters.

"We could not get anyone to commit to take volumes out of

Driftwood. The closest we got was the Heads of Agreement( HOA)

with Aethon Energy, one of the people told Reuters. Aethon is a

natural gas producer that acquired Tellurian drilling assets.

"If they could have gotten a few commercial arrangements it

would have convinced people the project could be built," the

person said.

Tellurian had reduced its liquefaction fees to closer to the

market's average $2.25 per million British thermal unit

processing fee, but potential customers wanted even lower fees,

the source said.