WSJ -- Occidental Seeks to Buy Anadarko for $38 Billion, Topping Chevron’s Deal ....................
April 24, 2019
Occidental Seeks to Buy Anadarko for $38 Billion, Topping Chevron’s Deal
Latest offer could start a potential bidding war for one of the key shale drillers in the Permian Basin
By Bradley Olson
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, following reports of Occidental’s interest.
Shares of Anadarko jumped 12% to $71.68. Occidental shares fell 2.5% to $60.78, while Chevron shares slipped 2.1% to $119.45.
-- Micah Maidenberg and Rebecca Elliot contributed to this article.
Write to Bradley Olson at Bradley.Olson@wsj.com
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