May 6, 2019

Anadarko calls Occidental's takeover bid "superior" to Chevron's

Ben Geman, author of Generate

Anadarko Petroleum Corp.'s board said Monday evening that Occidental Petroleum Corp.'s revised offer for the company is "superior" to Chevron Corp.'s bid, a move that gives Chevron 4 days to revise its offer. Chevron did not provide immediate comment.

Why it matters: It's the latest twist in a high-stakes battle to land the biggest oil mega-deal in years — one that will enhance the winner's position in the booming Permian Basin shale fields.

Where it stands: The move follows Occidental's move yesterday to sweeten its offer in a bid to undercut Chevron, its much larger rival. Occidental changed its $76-per-share offer to be 78% cash and 22% stock, compared to the 50-50 split in their prior bid.

The big picture: Late last month, Occidental said its total offer, including debt, was valued in the $57 billion range based on its share price at the time.

That's higher than Chevron's mid-April deal to acquire Anadarko at $65-per-share in a deal that would have been 75% stock and 25% cash, with a total value of around $50 billion including debt.

  • Anadarko said Monday that Occidental's offer yesterday was a "superior proposal" under the terms of their merger agreement with Chevron.
  • If Anadarko ends its agreement with Chevron, it will have to pay a $1 billion termination fee.

The intrigue: Occidental has bolstered its position in recent days by obtaining a $10 billion financing pledge from Warren Buffett, and, yesterday, a deal to sell Anadarko's assets in Africa to the oil-and-gas major Total if its bid is accepted.

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