Santos Ltd (ASX: STO) shares are rising on Monday morning.

At the time of writing, the energy producer's shares are up 1% to $7.74.

Why are Santos shares rising today?

Investors have been buying the company's shares this morning after it released an update on its potential takeover by the XRG Consortium.

According to the release, the takeover has taken a small step in the right direction after Santos entered into a process and exclusivity deed with the consortium in relation to its non-binding indicative proposal to acquire Santos for US$5.761 (A$8.89) per share in cash.

This process deed governs the basis upon which the XRG Consortium will have the opportunity to undertake due diligence and negotiate a binding scheme implementation deed (SID) to implement the potential transaction.

The release notes that the consortium has been granted exclusive due diligence access for a period of six weeks from Friday.

This includes customary no shop, no talk, no due diligence and notification obligations that apply during the exclusivity period.

Though, a fiduciary exception applies allowing the Santos board to deal with potentially superior proposals from competing acquirers from the date that is four weeks from today.

The XRG Consortium has also agreed to a confidentiality agreement with Santos.

What's next?

Santos advised that its shareholders do not need to take any action in relation to this announcement.

It also once again reminds them that there is no certainty that the XRG Consortium will enter into a binding SID or that a potential transaction will proceed.

As always, the company will continue to keep its shareholders informed in accordance with its continuous disclosure obligations.

Overall, this appears to be a step in the right direction for Santos and its shareholders.

What are analysts saying?

Macquarie recently gave its verdict on the offer. And while it won't rule out a competing proposal, it feels that one is unlikely. It said:

The US$5.76/sh cash proposal is a "final non-binding indicative offer", and follows 2 confidential proposals in March (US $5.04/sh & US$5.42/sh). EV/EBITDAX of 6.2x 2026e, 6.0x 2027e. Based on our risked-DCF analysis, we believe the deal implies US$69.25/ bbl (vs STO shares implying US$59.40/bbl on Friday's close on the same methodology) – above our long-term oil price assumption (US$65/bbl).

A competing offer looks unlikely, given STO has been "in play" for quite some time (however, other private equity or NOC's can't be ruled out now that an offer has been publicised).