Market Overview

Occidental Ups Its Bid For Anadarko, Threatens Chevron Deal

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Occidental Ups Its Bid For Anadarko, Threatens Chevron Deal

Anadarko Petroleum Corporation (NYSE: APC) soared 11 percent Wednesday morning after finding itself back in a bidding war.

What Happened

Occidental Petroleum Corporation (NYSE: OXY) raised its offer from $70 to $76 per share to compete with Chevron Corporation (NYSE: CVX)’s $65 per share, according to CNBC.

Occidental’s $57 billion acquisition would be made in half cash and half stock. Chevron’s deal struck earlier this month promised $65 per share in 75 percent stock and 25 percent cash.

Why It’s Important

Occidental had lost an earlier bid of $70 per share to Chevron’s lower bid. Management remains convinced of synergies on shale.

“Anadarko has great assets,” Occidental CEO Vicki Hollub told CNBC. “We are the right acquirer...because we can get the most out of the shale.”

But the Street is less optimistic. The stock sank 7 percent Wednesday morning.

Occidental’s offer threatens to derail the $33 billion Chevron-Anadarko deal, which would be the sixth-largest merger in oil and gas ever. Analysts were optimistic about the pairing, and the transaction was already approved by both companies’ boards. Its breakup fee is 3 percent.

What’s Next

Anadarko has not yet commented on the deal. Its shareholders have yet to approve the Chevron transaction.

Related Links:

Winter Is Over: Is It Time To Buy Natural Gas?

The Bearish Case On A Big Energy ETF

Posted-In: CNBC Vicki HollubM&A News Commodities Markets Media Best of Benzinga

 

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