U.S. independent oil and gas producer and Mozambique LNG developer Anadarko Petroleum has stated that the revised acquisition proposal from Occidental Petroleum was a “superior proposal” to the merger agreement with Chevron.
Chevron reached an agreement last month for the acquisition of Anadarko in a cash and stock deal valued at $33 billion.
The two companies agreed in a definitive agreement that Chevron would acquire all outstanding shares of Anadarko for a value of $65 per share. Anadarko shareholders will receive 0.3869 shares of Chevron and $16.25 in cash for each Anadarko share.
On the other hand, the revised Occidental proposal states that Anadarko would be acquired for a consideration consisting of $59.00 in cash and 0.2934 shares of Occidental common stock per share of Anadarko common stock.
To put it more simply, Occidental offered $38 billion to buy Anadarko for a value of $76 per share, an offer $5 billion higher than Chevron’s.
If accepted, Occidental will acquire Anadarko through a total transaction enterprise value of $57 billion, while Chevron’s total transaction value stands at $50 billion.
Anadarko said on Monday that it obtained committed financing for the entire cash portion of the aggregate transaction consideration.
The company notified Chevron that Anadarko’s board of directors unanimously determined that the revised proposal by Occidental was superior to the energy giant’s and that it would be terminating the merger agreement with Chevron.
The next step for Anadarko will be entering into a definitive merger agreement with Occidental in connection with the revised proposal.
Under the merger agreement, Chevron has the right to propose revisions to the terms of the agreement or to make another proposal until May 10, 2019.
It is worth noting that, if Anadarko terminates the agreement with Chevron to enter into a definitive agreement with Occidental, Anadarko will pay Chevron a $1 billion termination fee.
Also on Monday, France’s Total reached a binding agreement with Occidental to acquire Anadarko’s assets in Africa (Algeria, Ghana, Mozambique, South Africa) for a consideration of $8.8 billion. The transaction is contingent upon Occidental entering into and completing its proposed acquisition of Anadarko.