Occidental Pet (NYSE:OXY)
Historical Stock Chart
3 Months : From Apr 2019 to Jul 2019
By Bradley Olson
Occidental Petroleum Corp. Chief Executive Vicki Hollub defended her aggressive and ultimately successful pursuit of Anadarko Petroleum Corp. in her first public remarks to investors after striking the $38 billion deal.
A day after winning a battle for Anadarko that pitted the smaller Occidental against giant Chevron Corp., Ms. Hollub spoke at the company's annual meeting in Houston and took umbrage at those who confused Occidental's "determination with desperation," she said. "We approached this deal from a position of strength."
Noting that she was going off script in discussing her strategy during negotiations, Ms. Hollub said the company believed strongly that it would operate the Anadarko assets "better than anyone else."
"There's a lot to look forward to for us," she said. "It's a unique, transformational opportunity."
Ms. Hollub also explained the decision to seek $10 billion in financing from Warren Buffett's Berkshire Hathaway Inc. to help build a war chest for the deal, a move whose terms some shareholders have criticized as too expensive. She said the company would more than make up for the cost once it absorbs Anadarko's assets.
"We had to have those funds," she said. "The timing was critical for us."
Anadarko on Thursday accepted Occidental's $38 billion offer after Chevron bowed out of the bidding. Ms. Hollub had initially appeared to lose out to Chevron, which struck a $33 billion deal for Anadarko last month. But she went public with a higher offer on April 24 and ultimately persevered after lining up Berkshire's support and striking a deal to sell $8.8 billion in Anadarko's Africa assets to France's Total SA to strengthen her hand.
The Anadarko deal displeased some investors, who noted their discontent by voting against Occidental's board on Friday. The board received the support of a range of 70% to 82% of votes cast from shareholders, according to a preliminary tally.
Mutual fund giant T. Rowe Price Group Inc. was among the major investors who voted against the board this year, objecting to Occidental's decision to strike a deal without direct shareholder approval. By tapping Berkshire's funding, Ms. Hollub was able to sidestep a vote on the deal by reducing the amount of existing shares issued, a decision Ms. Hollub defended as a way to avoid hurdles and ensure an Occidental offer was not inferior to Chevron's.
The support for directors this year was the lowest at Occidental since 2013, when former Chairman Ray Irani stepped down after more than three fourths of the company's investors voted to remove him. Mr. Irani had angered some shareholders who were concerned he played a role in trying to oust the company's chief executive at the time, and had earlier been criticized for outsize compensation.
Write to Bradley Olson at Bradley.Olson@wsj.com
(END) Dow Jones Newswires
May 10, 2019 14:45 ET (18:45 GMT)
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