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Santos shares up amid takeover rumours

Santos Ltd shares are up strongly in early trade, amid rumours Woodside Petroleum may be poised to make a takeover move on the gas company.

Speculation has been growing in recent days that Woodside may be eyeing Santos in order to get exposure to the booming coal seam gas industry in Queensland.

Shares in Santos were up 64 cents, or 4.45 per cent, at $15.01 at 1030 AEDT, despite broader market falls.

It is the first time Santos shares have been above $15 this year.

On Wednesday, Australia's biggest-ever single trade deal was signed when BG Group signed a $60 billion deal with a Chinese company to sell it coal seam gas.

Austock Securities senior client adviser Michael Heffernan said that, in the past, Woodside chief executive Don Voelte had been sceptical of the value of converting coal seam gas to liquefied natural gas (LNG).

"(The takeover speculation) comes as a bit of a surprise, but circumstances change, and I wouldn't rule it out after the deal between BG and the Chinese group," Mr Heffernan said.

Woodside is valued at $36.9 billion in market capitalisation at close yesterday, while Santos was worth $11.9 billion.

Santos closed on Wednesday at $14.37, its share price having risen 12 per cent from $12.83 on February 26, largely on the strength of the takeover rumours, according to Fairfax Media in a report published on Thursday.

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More about: BG Group, Santos

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