Occidental Petroleum has bid $57bn for Anadarko

VICKI HOLLUB, chief executive of Occidental Petroleum, had been wooing Anadarko for nearly two years, according to people familiar with the events, when in early April her target went silent. On April 12th it became apparent why: Chevron, an oil major five times Occidental’s size, announced a $33bn deal to buy Anadarko instead (and assume its $15bn in net debt). Ms Hollub’s advances appeared spurned. Until, that is, Occidental made a counteroffer of $57bn (with debt) on April 24th, then on May 5th sweetened its terms. On May 6th Anadarko’s board backed it as “superior” to that of Chevron, which has until May 10th to up the ante. It is already the energy industry’s biggest bidding war in decades.

Ms Hollub’s bold gambit now includes allies: Total, a French oil giant, and Warren Buffett. People close to the matter recount how she secretly flew to Paris on April 26th, then to Omaha two days later to speak with the revered investor, to win their support. Occidental, she agreed, would sell Anadarko’s African assets to Total for $8.8bn, reducing its debt. Mr Buffett would pay $10bn for 100,000 preferred Occidental shares, which would receive a generous 8% yearly dividend, and the right to buy 80m shares of common stock for $62.50 each. Brian Moynihan, the boss of Bank of America, which is advising Occidental and in which Mr Buffett’s...

via Business Feeds

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