Anadarko Petroleum is preparing to endorse a hostile $ 55bn bid from its rival Occidental Petroleum, putting its sale to the oil major Chevron in jeopardy, according to people with knowledge of the matter
The Texas-based oil and gas company is expected to make a statement this week after its board determined that a cash and stock offer from Occidental is superior to the $ 50bn deal it agreed in early April with Chevron.
A decision by Anadarko to endorse the Occidental offer would be a rare win for a hostile bidder, which are often rebuffed. Anadarko acknowledged last week that it had received an offer from Occidental, weeks after it had rejected takeover advances from the group.
Anadarko could not immediately be reached for comment, but last week it said it would "carefully review the Occidental proposal to determine the course of action that it believes is in the best interests of the stockholders of the company."
Occidental, one of the five largest US oil and gas companies, offered to pay Anadarko shareholders $ 76 per share, and 22 percent premium to Chevron's bid, which is worth roughly $ 63 per share.
The bid from Occidental was evenly split into cash and stock. Chevron offered to pay 0.39 of its own stock and $ 16.25 in cash for each outstanding share of Anadarko. Anadarko has agreed to pay Chevron $ 1bn if it backs out of deal
It is unclear if Chevron will raise its bid for Anadarko. However, Chevron was unlikely to enter a bidding war for assets, the Financial Times has previously reported. Chevron had earlier refused to raise his bid when he had heard Occidental had offered more than $ 70 a share for Anadarko.
A deal would give Occidental valuable oil shale oil as well as assets in the Gulf of Mexico and a natural gas project in Mozambique. "It is much more synergistic for us than any other company that might look at it," Ms Hollub told the FT last week.
Occidental's interest emerged just minutes after Anadarko announced its sale to Chevron earlier this month, but analysts warned at the time that they did not see how Ms Hollub could outbid her bigger rival.
Ms Hollub has promised to sell assets worth up to $ 15bn if the deal to take over Anadarko is agreed, in part to win backing from Occidental shareholders who will sign off on the cash and stock deal