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Occidental Petroleum announced on Wednesday that it was proposing to buy Anadarko at a price higher than Chevron accepted by Anadarko, potentially opening a bidding war for one of the US companies with the strongest positions in the Permian.
Occidental Petroleum today addressed a letter to the Anadarko Board of Directors in which it proposed a "superior proposal" to buy Anadarko at a price of $ 76.00 per share. The shareholders of Anadarko would receive $ 38.00 in cash and 0.6094 common shares of Occidental for each Anadarko common share.
Occidental's proposal of $ 76.00 per share represents a premium of about 20% of the current value of the transaction with Chevron accepted by Anadarko, said Occidental in a statement.
"The 50-50 transaction in cash and shares is valued at $ 57 billion, based on the closing price of Occidental of April 23, 2019, taking into account the net debt and the book value of the investment. giving no control, "according to Occidental.
Less than two weeks ago, Chevron announced the conclusion of a definitive agreement on the acquisition of Anadarko by a stock and cash transaction valued at 33 billion US dollars, which strengthen its position in the Permian, the Gulf of Mexico and liquefied natural gas (LNG). The counterparty to the acquisition is structured in 75% equities and 25% in cash, which corresponds to an aggregate value of 65 USD per share based on the closing price of the Chevron share on 11 April 2019. Related: Trump's hard line on Iran surprises markets
The total enterprise value of the Chevron-Anadarko transaction is US $ 50 billion, including the assumption of the net debt and the book value of the non-controlling interest, while Occidental's offer values a potential transaction at 57 billion USD.
In his letter to Anadarko's board of directors today, Occidental said it had made three acquisition proposals to Anadarko since the end of March and was "surprised and disappointed" that the board of administration did not do it.
"We have been focusing on Anadarko for a number of years because we have long believed that we are ideally positioned to generate compelling value by combining them. We look forward to working immediately with the Anadarko Board of Directors and stakeholders to achieve this superior transaction, "said Vicki Hollub, President and CEO of Occidental, in a statement.
Following the offer of Occidental, Anadarko shares jumped 11% Wednesday in pre-market exchanges.
By Tsvetana Paraskova for Oilprice.com
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