Occidental gate crashes on Anadarko’s planned acquisition by Chevron  

Occidental Petroleum, one of the five largest US oil and gas production groups has gate crashed by launching a hostile bid for Anadarko Petroleum to try to stop its planned acquisition by Chevron, in the takeover battle of prized US shale oil assets.

Anadarko Petroleum has to weigh the overtures from Occidental Petroleum and one could have mistaken for  “Dallas” the American TV show saga of the Ewing family and its massive oil empire. Occidental gate crashed Anadarko’s sale to Chevron with a £42.35bn ($55bn) bid. These are all good for Anadarko’s shareholders as they are eventually emerging as the biggest winners.

The nominal value of Occidental’s bid is $76 per share, half in cash and half in stock.  The deal signed with Chevron two weeks ago was at a value of $65 per share, 75 per cent in stock.

Chevron said that it believed it could generate $2bn in operating expense and capex savings while Occidental, which has an enterprise value of $54bn is talking about $3.5bn in cash synergies. Occidental shares have dropped nearly a tenth, wonders why Anadarko agreed a $1bn termination fee in its Chevron deal.

Like Chevron, Occidental wants to capitalise on the  appeal of Anadarko’s assets in the Permian Basin of Texas and New Mexico, the heart of US Shale oil boom.

Anadarko’s board rejected the offer from Occidental, (who incidentally has to secure  approval from its shareholders),  on the grounds that there was too great a chance that the deal would not be completed.

Occidental’s cash and share offer of $76 per Anadarko share, a premium of 22 per cent over the bid from Chevron.