Several major Occidental Petroleum Corp shareholders have voiced opposition to t...
HOUSTON - Several major Occidental Petroleum Corp shareholders have voiced opposition to the oil company’s $38 billion bid for rival Anadarko Petroleum Corp that now includes a pricey financing deal with billionaire Warren Buffett.
Occidental shares were trading on Thursday at $57.48, down sharply from $66.63 a month ago, prior to rumors it might challenge Chevron. It trumped Chevron’s bid last week, and its offer now includes $10 billion in financing from Buffett’s Berkshire Hathaway Inc in exchange for preferred shares that would pay an 8 percent dividend.
T. Rowe Price Group Inc, which holds shares in all three oil companies, cited merger risks and the cost of the Berkshire infusion. John Linehan, portfolio manager at T. Rowe Price, said Buffett’s deal could allow Occidental to restructure its cash-and-stock deal to avoid a shareholder vote, although its current offer includes a vote.
“That’s very expensive paper,” Linehan said of the agreement with Berkshire. “They could have borrowed far cheaper than that.” South Texas Money Management, which has $2.3 billion in assets under management, including shares of Chevron and Occidental, hopes Chevron prevails. Even if Chevron raised its bid and offered “a little more cash,” Ledoux would still consider the deal a good one for Chevron because the company has expertise in Anadarko’s shale, liquefied natural gas and offshore assets.
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