Occidental Petroleum offered $76 a share to buy oil and gas driller Anadarko Petroleum. The Occidental offer was sent in a letter to Anadarko’s board and offered $38 in cash and 0.6094 Occidental shares. The deal values Anadarko at $57 billion, including debt.
The offer follows an April 12 announcement that Chevron had reached an agreement to Anadarko for $65 a share, in a 75% stock and 25% cash transaction. The Chevron offer valued Anadarko at $50 billion.
In an interview on CNBC, Occidental Chief Executive Officer Vicki Hollub said the offer was friendly. “Anadarko has great assets,” she said.
“We are the right acquirer for Anadarko Petroleum because we can get the most out of the shale,” Hollub said. “We have a lot more experience there. We are performing really, really well, and what hasn’t been talked about very much is that the upside in this deal is the shale play, is the shale development.”
Hollub said Occidental could also improve Anadarko’s performance in Colorado’s Denver Julesberg Basin.
“In the two years that we’ve been working this, there is no other opportunity that has the upside potential that this does,” she said. “This is one of those very rare opportunities.”
Chevron pitched itself as well-positioned to capitalize on Anadarko’s shale assets in the Permian Basin and argued that a deal would tie together a 75-mile-wide strip of continuous land that would allow Chevron to bring efficient, industrial-scale production to the region, but Occidental’s Hollub said her company was outperforming other drillers in the Permian.
Analysts at KeyBanc Capital Markets said a bidding war with Chevron was not in the best interest of Occidental shareholders.
Pavel Molchanov, an analyst at Raymond James, said Occidental was “going head-to-head against a supermajor four times its size” but predicting a winner was still difficult.
Anadarko shares were up more than 12% in midday trading.