Occidental Seeks to Buy Anadarko for $38 Billion -- 3rd Update
April 24 2019 - 9:31AM
Dow Jones News
By Micah Maidenberg
Occidental Petroleum Corp. offered to buy Anadarko Petroleum
Corp. for $38 billion, launching a potential bidding war for a
company that previously agreed to be purchased by Chevron Corp. for
about $33 billion.
The Houston-based company said it has made overtures to Anadarko
since late March, including two offers that were higher than what
the company agreed to with Chevron, according to a letter
Occidental Chief Executive Vicki Hollub sent to Anadarko's
board.
"We were surprised and disappointed that your board did not
engage with us on that proposal," Ms. Hollub wrote in the
letter.
Occidental is offering a cash-and-stock deal of $76 a share,
about $11 per share more than the value of the Chevron transaction
on the day it was announced April 12. The offer, $38 in cash and
0.6094 share of Occidental stock, represents a 20% premium to the
Chevron agreement as of Tuesday's close. Occidental's offer was
valued at $57 billion including debt.
Anadarko has prized assets from Texas to Mozambique, and
Occidental is seeking to expand its footprint in the booming
Permian basin, an area where it is already one of the largest
operators.
Earlier this month, Chevron said it would buy Anadarko in a
cash-and-stock deal valued at $33 billion. In that agreement,
shareholders would receive 0.3869 share of Chevron and $16.25 in
cash per share.
On Wednesday, Occidental expressed frustration with Anadarko,
which agreed to pay a $1 billion breakup fee with Chevron if that
deal doesn't go through.
"It is unfortunate that Anadarko agreed to pay a break up fee of
$1 billion, representing approximately $2 per share, without even
picking up the phone to speak to us after we made two proposals
during the week of April 8 that were at a significantly higher
value to the transaction you were apparently negotiating with
Chevron," Ms. Hollub said in her letter.
Chevron and Anadarko couldn't immediately be reached for comment
Wednesday morning. A Chevron spokesman earlier said the company
wasn't aware of any Occidental discussions with Anadarko during its
negotiations with the company.
Shares of Anadarko jumped 11% in premarket trading Wednesday on
the news, while Occidental's stock fell 5%. Chevron shares ticked
0.1% lower.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
April 24, 2019 09:16 ET (13:16 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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