The Santos Ltd (ASX: STO) share price is looking worse for wear on Friday, breaching the $7 mark. This follows reports that the oil and gas company’s largest shareholder launched a selling spree last night.
At the time of writing, shares in the $14.4 billion Australian energy company are fetching $6.87, down 4.2%. For context, the S&P/ASX 200 Index (ASX: XJO) is having a disastrous day, down 2.14%.
Let’s take a look at the latest Santos news.
Hefty selldown
The broader base of Santos shareholders appears to be following the lead of its largest investor on Friday. According to reports published by The Australian, private Chinese energy and investment company ENN Group initiated a substantial sale of shares last night.
Prior to this event, ENN held a 10% stake in Santos through its ‘United Faith Ventures’ investment vehicle, making it the company’s largest shareholder.
It is believed that investment bankers Morgan Stanley and UBS were called in to sell 60 million shares in a block trade on behalf of ENN. Although Santos closed at a price of $7.17, the deal was conducted between $6.70 and $6.75 per share. Additionally, bids were accepted in 1 cent increments.
All in all, the sale amounted to a total value of $403 million. Despite this large sale, ENN would still hold approximately 147.6 million shares based on documentation.
Interestingly, this is not the first time ENN has reduced its interest in Santos. Back in March, the shareholder waved goodbye to a third of its holding — with Santos shares commanding a $7.33 price at that time. This monumental selldown was worth around $785 million, with Morgan Stanley and UBS carrying out that transaction as well.
Analysts target on Santos share price
The large sale comes amid a bullish trend in the energy sector. As Europe and China grapple with turbulence in energy supply, prices for energy-bearing resources such as oil and gas are rising with authority.
As such, one analyst recently shared an optimistic perspective on the Santos share price, setting a price target of $8.55. This would indicate a potential 24% upside in the company’s value in the next 12 months (excluding dividends).
The post Santos (ASX:STO) share price sinks after investor sells $403m stake appeared first on The Motley Fool Australia.
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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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