Occidental revise bid for Anadarko in buyout match with Chevron

Vicki Hollub, CEO, Occidental Petroleum

Mary Catherine Wellons | CNBC

On Sunday, Occidental Petroleum launched a revised offer for Anadarko Petroleum, offering most of the money to shareholders as it attempts to track Chevron's acquisition of the international oil and gas borrower.

Occidental still offers to buy Anadarko for $ 76 per share, but will now pay 78% in cash and 22% in stock. The $ 57 billion transaction was originally structured as a 50-50 cash and equity deal when Occidental first made its public bid for Anadarko nearly two weeks ago.

Anadarko agreed to sell its business to Chevron last month for $ 65 per share in a 75% share and a 25% cash deal worth $ 50 billion including debt. Anadarko's board resumed negotiations with Occidental last week after it was decided that the competition bid could surpass Chevron's offer.

Occidental states that the revised offer creates immediate value and makes it more certain that the agreement will close.

By offering more money, Occidental will no longer have to seek approval from the shareholders to buy Anadarko. The risk that Occidental shareholders voted down the purchase created uncertainty that Occidental's management could bring the buyout over the finish line.

"Our revised proposal and merger agreement represents our comprehensive response to all points your council has raised with us during the past week," said Occidental CEO Vicki Hollub in a letter to Anadarko's board.

Hollub revealed in The letter as an advisor to the board of Anadarko asked for three seats on the Occidental board. Occidental's new offer does not include this provision because the enhanced bid does not guarantee giving up the three seats, she said.

Earlier on Sunday, Occidental announced that it had come one agreement to sell Anadarko's African assets to French oil price Total for $ 8.8 billion, which would achieve most of the Occidental's goal of selling $ 1[ads1]0 billion to $ 15 billion in assets as part of the buyout.

The announcement followed Warren Buffetts Berkshire Hathaway's commitment last week to invest $ 10 billion in Occidental to fund Anadarko buyout, some investors and analysts, including CNBC's Jim Cramer, has criticized the sale of preferred stock to Berkshire because it comes with a steep 8% annual dividend.

Both the disposal and Buffet's investment are conditional on Occidental terminating the agreement and will guarantee the Cash component in the drill's bid.

"The financial support for Berkshire Hathaway, in addition to the agreement we announced with Total, allows us to share our balance while focusing our integration efforts on the assets that will give us the greatest value," Hollub said in a press release. . [19659002] Following the proposed sale to Total, Occidental will control Anadarko's assets in US shale pools, the Gulf of Mexico and South America. Occidental is focused on the slate area, especially Anadarko's position in the Permian Basin, the supreme American slate that stretches across western Texas and southeastern New Mexico.

Chevron also considers the permissible assets of the crown jewel in Anadarko's portfolio, but its Gulf of Mexico position also overlaps with Anadarko's deepwater resources. Chevron, a major player in liquefied natural gas, is likely to retain Anadarko's LNG project in Mozambique in South Africa.

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