Late last year, one of the largest proposed takeovers in Australian corporate history moved close to completion before the buyer group walked away.
The proposed acquisition of Santos, the Adelaide-based oil and gas producer, was valued at approximately A$36 billion including debt. The buyer group was led by XRG, the international investment arm of ADNOC, alongside ADQ and the US private equity firm Carlyle. According to Reuters, the consortium withdrew its indicative bid after months of negotiations and due diligence.
Several public explanations surrounded the collapse of the transaction, including valuation, tax, regulatory risk and political risk. However, one detail carried a wider lesson for every business owner, commercial property owner and vendor preparing an asset for sale.
During the sale process, reporting by ABC News revealed a long-running methane leak at the Darwin LNG plant. The issue related to a faulty storage tank and a design flaw that had allowed methane emissions over many years. ABC later reported that the public disclosure of the leak became part of the wider context surrounding the failed takeover.
The commercial lesson is clear.
A problem disclosed early can become a point of negotiation. A problem discovered independently by the buyer can change the entire character of the transaction.
Every serious buyer expects complexity.
Businesses carry operational issues, customer concentration, staffing risks, lease obligations, compliance matters, unresolved disputes, margin pressure and historical decisions that require explanation. Commercial properties can carry maintenance issues, tenancy risks, rent review concerns, unapproved works, environmental matters, title questions, zoning constraints or incomplete documentation.
These issues can often be assessed, priced, managed or addressed through contract terms, warranties, conditions, settlement adjustments and commercial negotiation.
The greater damage occurs when the buyer discovers an important issue through another source.
Once that happens, the sale process shifts. The buyer begins to examine every document, statement and assumption through a different lens. The valuation, tax position, compliance material, trading history, lease structure and timing all become part of a wider concern about trust.
At that point, the question in the buyer’s mind changes from “How do we deal with this issue?” to “What else might emerge?”
That is the moment a seller begins to lose control of the transaction.
Major corporate transactions rarely collapse because of a single issue. The Santos transaction involved large assets, foreign investment considerations, energy security questions, regulatory issues and significant commercial complexity.
Even so, the reporting around the Darwin LNG methane leak offers a powerful example of how late-stage information can affect confidence during due diligence.
Buyers can deal with known risk. They can price it. They can seek warranties. They can request indemnities. They can adjust the offer. They can restructure the transaction.
What becomes harder to repair is the loss of confidence that occurs when an issue appears to have surfaced outside the seller’s own disclosure process.
This principle applies far beyond public companies and billion-dollar energy deals. It applies to the sale of a family business, a commercial building, a hospitality venue, an industrial site, a development asset or a long-held investment property.
The scale changes. The psychology remains the same.
For business owners preparing for sale, the strongest position begins before the asset goes to market.
That means identifying difficult issues early, understanding their commercial impact and deciding how each one should be disclosed. The purpose is to prepare the buyer with context, rather than allow the issue to appear under pressure during due diligence.
That issue might be:
A major customer representing a large share of revenue.
A lease with unfavourable rent review terms.
A compliance certificate that requires attention.
A dispute with a supplier, tenant, employee or neighbouring owner.
A structure, fit-out or improvement with incomplete approvals.
A trading period that requires explanation.
A key person dependency inside the business.
A maintenance issue inside a commercial property.
A tenancy risk that affects future income.
A known environmental or operational concern.
When a seller raises the issue first, they control the framing. They can explain the history, quantify the risk, present supporting documents, outline the commercial impact and propose a practical pathway forward.
The issue becomes part of the transaction structure rather than a late-stage threat to the transaction itself.
In any business sale or commercial property transaction, trust has commercial value.
A buyer can accept a known issue when the commercial case remains strong. They can proceed with risk when the risk has been explained properly. They can negotiate around a problem when the seller has shown discipline, transparency and control.
Trust supports momentum. It reduces friction between advisers. It helps the buyer stay focused on the value of the asset rather than the fear of what else might emerge.
For sellers, this matters because deal confidence often influences price, terms and completion.
When trust is strong, the buyer is more likely to keep working through the transaction. When trust weakens, every issue feels larger, every adviser becomes more cautious and every commercial assumption is questioned more aggressively.
That is why early disclosure is a value-protection strategy.
Before selling a business or commercial property, owners should undertake a disciplined pre-sale review.
This review should identify the issues a buyer is likely to discover, assess how those issues affect value and determine the best way to present them. It should also bring key documents into order, including leases, licences, contracts, approvals, financial records, maintenance records, compliance certificates and correspondence around known risks.
The aim is to enter the sale process with clarity.
A prepared seller can explain the asset with confidence. They can anticipate buyer concerns. They can support the asking price with stronger documentation. They can reduce the chance of late surprises during due diligence.
This preparation is especially important for family-owned businesses, commercial property owners and long-held assets where documentation may have accumulated over many years.
The Santos takeover collapse offers a clear reminder for owners preparing for sale in Wollongong, the Illawarra, the South Coast and across the wider Australian market.
Buyers value transparency. They reward preparation. They respond to sellers who understand their asset, disclose issues properly and manage the transaction with commercial discipline.
A business or property with known issues can still sell well when those issues are presented clearly and handled strategically.
A seller who prepares early enters the negotiation with greater credibility, stronger control and a better chance of protecting the value of the asset.
A seller should identify and disclose material issues that may affect value, risk, continuity or buyer confidence. This can include financial performance concerns, customer concentration, lease obligations, legal disputes, staffing dependencies, compliance matters, supplier issues and incomplete documentation.
Due diligence preparation helps the seller understand what the buyer is likely to review before the sale process begins. It allows issues to be addressed early, documents to be organised and risks to be explained with context. This can reduce deal friction and support a stronger negotiation.
Disclosure can lead to a price adjustment when an issue has a measurable commercial impact. However, early disclosure often protects value by preserving trust, reducing late-stage uncertainty and allowing the seller to frame the issue properly.
When a buyer discovers a material issue during due diligence, they may seek a price reduction, request stronger warranties, impose additional conditions, delay the transaction or reconsider the deal. The outcome depends on the issue, its commercial impact and the level of trust between the parties.
Comelli Commercial helps owners prepare businesses and commercial properties for sale by reviewing the asset, identifying commercial risks, improving presentation, strengthening documentation and advising on how difficult issues should be handled before the buyer’s due diligence begins.
If you are considering the sale of a business or commercial property, the strongest results often begin before the asset reaches the market.
A confidential conversation early in the process can help identify the issues that matter, strengthen the way the asset is presented and improve the quality of the negotiation that follows.
Comelli Commercial has advised business and property owners across generations, with a practical understanding of how trust, preparation and commercial judgement influence sale outcomes.
Comelli Commercial. Established 1967.
Daniel Connolly is the Principal of Comelli Commercial and a senior commercial consultant with more than three decades of experience across business sales, commercial property, asset strategy, acquisitions and transaction advisory.
His experience spans buying, building, operating and selling businesses and property assets, including engineering firms, accommodation businesses, commercial assets and apartment developments. This practical background gives him a rare perspective on what happens inside a transaction before, during and after due diligence.
Daniel advises business owners, commercial property owners and investors on how to prepare assets for sale, identify risks before buyers discover them, protect value during negotiation and approach complex commercial decisions with greater clarity. His work is grounded in practical commercial judgement, disciplined preparation and a deep understanding of how trust, disclosure and timing influence transaction outcomes.
As Principal of Comelli Commercial, Daniel continues the firm’s long-standing advisory tradition, supporting clients across Wollongong, the Illawarra, the South Coast and the broader Australian market with business sales, commercial property strategy and commercial consulting.
