From Paris to Omaha: How the CEO of Occidental CEO outmaneuvered Chevron in the bidding war for Anadarko Devikakrishnak JessicaRAult
NEW YORK - Occidental Petroleum chief executive Vicki Hollub was caught off guard when U.S. oil giant Chevron swooped in last month with a $33 billion offer to buy Anadarko Petroleum, the oil and gas exploration and production firm she had been wooing for nearly two years.
Occidental had struggled to win over Anadarko because its first public $38 billion offer of 50 percent cash and 50 percent stock, as well as previous offers made privately, required the approval of Occidental shareholders, and Anadarko was not convinced they would go for the deal, two sources familiar with the discussions told Reuters.
It would make Occidental the third-largest U.S. oil company with a market value of about $80 billion, dwarfed only by global giants Exxon Mobil and Chevron. “Our concern is the willingness of the management team at Occidental to cut very favorable deals against the interests of shareholders on a longer-term basis,” said John Linehan, portfolio manager at T. Rowe Price.
When Chevron announced a deal on April 12 to buy Anadarko, Hollub gathered the merger team. They were shocked that Anadarko had accepted a bid that was $11 per share below what Occidental had privately offered, three of the people familiar with the discussions said. Just two days after sending the letter, Hollub was in Paris meeting with Total CEO Patrick Pouyanne to discuss Anadarko’s African assets, according to two sources familiar with the discussions.
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