Anadarko Petroleum is preparing to endorse a hostile $55bn bid from its rival Occidental Petroleum, putting its sale to 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 $5obn 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 Occidental’s proposal to determine the course of action that it believes is in the best interest of the company’s stockholders”.
Occidental, one of the five largest US oil and gas production companies, offered to pay Anadarko shareholders $76 per share, a 22 percent premium to the bid from Chevron, which is worth roughly $63 per share. The bid from Occidental was evenly split i1 cash and stock. Chevron offered to pay
0.39 of its own stock and $16.25 in cash for each share of Anadarko outstanding. Anadarko has agreed to pay Chevron $1bn if it backs out of the deal. It is unclear if Chevron will increase its bid for Anadarko. However, people with knowledge of the oil major’s thinking have said Chevron was unlikely to enter a bidding war for the assets, the Financial Times has previously reported. Chevron had earlier refused to raise its bid when it had heard Occidental had offered more than $70 a share for Anadarko.