Anadarko Bidding War Heats Up
American multinational energy corporation Chevron (CVX) is working on integrating the hydrocarbon exploration company Anadarko Petroleum (APC), even as it faces a higher rival takeover bid for the oil explorer from Occidental Petroleum Corp, said a report in Bloomberg.
However, it is becoming increasingly difficult for Anadarko to justify sticking with Chevron's$30.9 billion takeover as its shares gain following Occidental Petroleum higher offer.
"The bidding war is breaking out over Anadarko, together using Occidental making an offer it says is about a 20% premium into Chevron’s deal announced earlier this month, some rare movement not often seen from the U.S. petroleum market," said market reports.
Anadarko's board of directors has decided that Occidental's $38 billion cash-and-stock bid could lead to a deal that would be superior to the one it has with Chevron, as per Reuters.
Anadarko will now kick off negotiations with Occidental to see if it can finalize a deal, the report said.
But there is no certainty that Occidental, which was vying for Anadarko before Chevron clinched its deal, will be able to secure its own deal, the report said. If it does, Chevron will be given an opportunity under its contract with Anadarko to match Occidental's deal.
Anadarko is one of the largest independent U.S. oil producers and has been the subject of merger speculation for some time; a takeover would be the biggest oil-related transaction in at least four years.