Occidental revises Anadarko's bid for buyout with Chevron

Occidental Petroleum on Sunday presented a revised takeover bid to Anadarko Petroleum, proposing to pay shareholders a large portion in cash to try to derail Chevron's acquisition of the international oil and gas driller.

Occidental still proposes to buy Anadarko for $ 76 per share, but would now pay 78% in cash and 22% in shares. The $ 57 billion transaction was initially structured as a 50/50 transaction, when Occidental launched its bid on Anadarko nearly two weeks ago.

Anadarko has agreed to sell its business to Chevron last month for $ 65 per share, in a deal involving 75% of the shares and 25% in cash, for $ 50 billion, including debt. The Anadarko Board of Directors resumed negotiations with Occidental last week after determining that the competing bid could be superior to Chevron's bid.

Occidental says the revised offer creates immediate value and makes more certain the conclusion of the transaction.

By offering more liquidity, Occidental will no longer need to seek shareholder approval to buy Anadarko. The risk that Western shareholders will refuse the purchase has created uncertainty about whether Occidental's management could bring the buy-in to the finish line.

"Our revised proposal and our merger agreement represent our overall response to all the points raised by your board over the past week," said Western Executive Director Vicki Hollub in a letter to the Board of Directors. 39, administration of Anadarko.

Hollub revealed in the letter that the Anadarko board 's lawyer had asked for three seats on the Western board of directors. The new Western offer does not include this provision because the improved offer does not warrant the abandonment of the three seats, she said.

Earlier Sunday, Occidental announced it had reached an agreement to sell the African assets of Anadarko to the French oil company Total for $ 8.8 billion. As part of the buyout, Occidental would aim to sell $ 10 billion to $ 15 billion of assets.

The announcement comes after Warren Buffett's Berkshire Hathaway pledge last week to invest $ 10 billion in Occidental to help fund the Anadarko takeover. Some investors and analysts, including CNBC's Jim Cramer, have criticized the sale of preferred shares in Berkshire because it is accompanied by a high annual dividend of 8%.

Buffett's divestiture and investment are conditional upon the conclusion of the transaction by Occidental and would guarantee the cash component of the driller's bid.

"The financial support of Berkshire Hathaway and the agreement we have announced with Total allow us to reduce our balance sheet while focusing our integration efforts on the assets that will bring us the most value" Hollub said in a press release.

As a result of proposed sales to Total, Occidental would control Anadarko's assets in US oil shale basins, the Gulf of Mexico and South America. Occidental focuses on the shale area, particularly the Anadarko position in the Permian Basin, the largest American shale deposit that spans western Texas and southeastern New Mexico.

Chevron also considers the Permian assets to be the jewel in Anadarko's portfolio, but its position in the Gulf of Mexico also overlaps with Anadarko's deepwater assets. Chevron, a major player in liquefied natural gas, is likely to retain Anadarko 's LNG project in Mozambique, southern Africa.