A buyout bid for Anadarko Petroleum shook up the oil industry once again early on April 24, only this time the offer comes not from Chevron, but from Occidental Petroleum (OXY). Chevron and Anadarko jointly announced their deal two weeks ago, but at the same time, CNBC reported that OXY had actually offered a higher price in its own takeover bid.
However, Anadarko management rejected the OXY offer due to what it called “structural issues” around its bid. OXY’s reported offer at that time valued Anadarko stock at $70 per share, as compared to the $65 per share being offered by Chevron.
On Wednesday morning, OXY upped its bid to $76 per share, which, assuming it has also dealt with the “structural issues” in a way that would satisfy the Anadarko board of directors, would place pressure on Anadarko to reconsider its sale to Chevron.
As of this posting at noon on April 24, neither Anadarko nor Chevron had responded to OXY’s new bid.
“Anadarko has great assets,” Occidental CEO Vicki Hollub said in a interview on CNBC’s “Squawk Box ” on Wednesday. “We are the right acquirer … because we can get the most out of the shale.”
In response to the OXY offer, DrillingInfo analyst Andrew Dittmar said in a release that Anadarko’s prime acreage in the Permian basin is driving the competition between the two competing suitors: “The Permian is clearly the primary driver of this competition between Chevron and Occidental for Anadarko. Occidental and Chevron are already the top two producers in the Permian, and whichever comes out on top in the struggle for Anadarko will claim the top spot. Anadarko also brings to the table some of the best undrilled well locations in the basin. For the increased Oxy bid of $57 billion, we are raising the value allocated to Permian acreage up to nearly $20 billion or ~$80,000 per acre,” Dittmar added.
We will have more as events warrant.