Occidental bid for Anadarko reached mid-$70s per share earlier than Chevron deal disrupted talks: Sources


FILE - In this Tuesday, Aug. 25, 2009 file photo, crew members with Anadarko Petroleum Corp., work on a drilling platform on a Weld County farm near Mead, Colo., in the northeastern part of the state. The drilling process called hydraulic fracturing, or fracking, is shaking up world energy markets from Washington to Moscow to Beijing. Some predict what was once unthinkable: that the U.S. won't need to import natural gas in the near future, and that Russia could be the big loser. (AP Photo/Ed And

Ed Andrieski

FILE – In this Tuesday, Aug. 25, 2009 file photo, crew members with Anadarko Petroleum Corp., work on a drilling platform on a Weld County farm near Mead, Colo., in the northeastern part of the state. The drilling process called hydraulic fracturing, or fracking, is shaking up world energy markets from Washington to Moscow to Beijing. Some predict what was once unthinkable: that the U.S. won’t need to import natural gas in the near future, and that Russia could be the big loser. (AP Photo/Ed And

Previously, sources indicated Occidental was willing to pay more than $70 a share, and it was uncertain what portion of the purchase price would be paid out in cash.

The Chevron deal would pay shareholders $65 per share in a 75% stock and 25% cash transaction.

It is not clear whether Chevron would have increased its offer prices had the Anadarko-Occidental talks continued into the weekend. Sources indicate that $65 per share may have been the most Chevron was willing to pay.

Sources say Chevron was willing to increase the ratio of cash to stock, but Anadarko wanted more shares of the oil major.

The cash-stock structure may indicate why talks between Anadarko and and Occidental broke down. Assuming Occidental paid $76 per share, the company would have had to issue as much as $23 billion worth of stock, raising questions about how traders and shareholders would have responded to the deal, according to Faber.

Occidental has a $47.5 billion market capitalization.



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