Woodside Energy last month denied media speculation that it was negotiating a potential deal with ExxonMobil. However, Macquarie said there was a logical basis for reaching the deal. The agency notes that Woodside's merger and acquisition strategy over the past five years has repositioned it to strategically align with ExxonMobil's upstream, LNG and new energy goals. “In our opinion, a significant premium that is difficult to achieve as an independent entity may increase the likelihood of board participation,” Macquarie said. Despite this, the deal will face several hurdles, including getting approval from the Australian Foreign Investment Review Board. Macquarie raised Woodside's target price by 9% to $32.80 per share after factoring in the 20% probability of a merger proposal in the next 12 months. The agency also raised Woodside's rating from “neutral” to “better than the market.”

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