US Anadarko Finds New Oxy Bid a Better Deal
US producer Anadarko said May 6 it has determined that a revised bid from Occidental Petroleum received May 5 is superior to the previously announced merger agreement with Chevron.
Occidental’s most recent offer – with the backing of US billionaire investor Warren Buffet – is $59 cash and 0.2934 Occidental common shares for each common share of Anadarko. It’s original offer on April 24 was for $38 cash and 0.6094 Occidental shares for each Anadarko share.
The revised proposal, Anadarko said, “would deliver greater cash value than any prior Occidental proposal” and is not conditional on the approval of Occidental’s shareholders.
Anadarko says it intends to terminate the agreement with Chevron and pursue a definitive agreement with Occidental, but is leaving the door open until May 10 for Chevron to sweeten its original offer of $16.25 in cash and 0.3869 common shares of Chevron for each share of Andarko.
Under the terms of the Chevron merger agreement, Chevron has the right, until May 10, to make revisions to the agreement or make another proposal. If, after May 10, Anadarko terminates the merger agreement with Chevron in order to enter a definitive agreement with Occidental, it will pay a $1bn termination fee to Chevron. Until then, Anadarko said, the merger agreement with Chevron will remain in effect and its board reaffirms its existing recommendation of the Chevron transaction.
“There can be no assurance that negotiations with Occidental will result in a transaction that is superior to the pending transaction with Chevron,” Anadarko said. “Further, the terms of any agreed-upon transaction with Occidental may vary from those reflected in Occidental’s revised proposal.”