This Current Report on Form
8-K
discloses certain additional information relating to the proposed acquisition of
Anadarko Petroleum Corporation (“Anadarko”) by Occidental Petroleum Corporation (“Occidental”). Subject to the terms and conditions of the Agreement and Plan of Merger (the “Merger Agreement”), dated as of May 9,
2019, by and among Anadarko, Occidental and Baseball Merger Sub 1, Inc., a wholly owned subsidiary of Occidental (“Merger Sub”), Merger Sub will merge with and into Anadarko (the “Merger”), with Anadarko surviving and continuing
as the surviving corporation in the Merger and a wholly owned subsidiary of Occidental.
In connection with the Merger Agreement and the transactions
contemplated thereby, a putative class action lawsuit was filed on behalf of Anadarko stockholders in the United States District Court for the District of Delaware. The lawsuit is captioned
John Thompson v. Anadarko Petroleum Corporation et
al.
, Case
1:19-cv-01368
(filed July 23, 2019). In general, the complaint asserts claims against Anadarko and Anadarko’s board of directors, alleging, among
other things, that the defendants failed to make adequate disclosures in Anadarko’s proxy statement relating to the Merger (in its definitive form, the “Proxy Statement”). Anadarko believes that the allegations in the complaint are
without merit.
While Anadarko believes that the disclosures set forth in the Proxy Statement comply fully with applicable law, to moot plaintiffs’
disclosure claims, to avoid nuisance, potential expense and delay, and to provide additional information to Anadarko’s stockholders, Anadarko has determined to voluntarily supplement the Proxy Statement with the below disclosures. Nothing in
the below supplemental disclosure shall be deemed an admission of the legal necessity or materiality under applicable law of any of the disclosures set forth herein or in the Proxy Statement. To the contrary, Anadarko denies all allegations in the
litigation that any additional disclosure was or is required.
SUPPLEMENTAL DISCLOSURES
The following information supplements the Proxy Statement, and should be read in conjunction with the Proxy Statement, which should be read in its entirety,
including the annexes thereto. All page references in the information below are references to pages in the Proxy Statement, and the terms used below have the meanings set forth in the Proxy Statement.
The following sentence is hereby inserted immediately after the last sentence in the third paragraph on page 60 of the Proxy Statement under the heading
“Discounted Cash Flow Analysis” (such paragraph beginning with “Evercore calculated ranges of terminal values for Anadarko . . .”):
“The range of perpetuity growth rates and the range of terminal year enterprise value to LTM EBITDAX multiples were based on Evercore’s professional
judgment and experience, taking into account the Management Strip Forecasts and the closing price of shares of Anadarko common stock as of May 7, 2019, as applicable.”
The third sentence in the fourth paragraph on page 60 of the Proxy Statement under the heading “Discounted Cash Flow Analysis” (such paragraph
beginning with “Evercore then discounted Anadarko’s projected, unlevered free cash flows . . .”) is hereby amended and restated to read as follows:
“Evercore then deducted from the ranges of implied enterprise values Anadarko management’s estimate of Anadarko’s net debt (calculated as total
debt less available cash and cash equivalents of Anadarko and Western Midstream Partners, L.P.) of $15,898 million as of March 31, 2019 as reflected in Anadarko’s consolidated balance sheet as of that date and adjusted for the payment
of the $1 billion termination fee by Anadarko in connection with the termination of its prior merger agreement with Chevron (the “Chevron termination fee”), plus
non-controlling
interests in
Western Midstream Partners,