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MOSCOW (MRC) -- Shareholders of Anadarko
Petroleum Corp voted overwhelmingly to sell the company for USD38 billion to
rival Occidental Petroleum Corp , ending a short-lived contest that pitted two
of the most storied names in the oil industry against one another, said Reuters.
Occidental in May beat out Chevron Corp to grab a major oil industry prize:
Anadarko’s nearly quarter million acres in the Permian Basin, the top U.S. shale
field, where low-cost output has helped turn the United States into the world’s
top oil producer at more than 12 million barrels per day.
Anadarko’s shareholders voted 99% in favor of the deal that gives them
USD72.34 per share based on Wednesday’s closing price for Occidental. Investors
also voted in a non=binding measure 71% against executive payouts tied to the
deal. Anadarko’s top six executives are to receive USD300 million in
payouts.
Occidental said immediately after the vote it had closed the transaction, and
had named new executives to run Western Midstream Partners LP, Anadarko’s
natural gas pipeline business. Its shares rose 2.5% to close at USD47.13.
“We begin our work to integrate our two companies and unlock the significant
value of this combination for shareholders,” Occidental Chief Executive Vicki
Hollub said in a statement.
Anadarko shares are up 56% from the day before it disclosed merger talks,
while Occidental shares are down 30% since its discussions were revealed.
The market’s sour response has dampened enthusiasm for deals. Even with
stocks of many shale firms trading at multi-year lows, it may not be enough to
spur a buyout spree by the world’s largest oil and gas firms, said Artem
Abramov, analyst with Rystad Energy.
“Some super-majors might be waiting for even lower pricing,” Abramov
said.
Hollub has been lining up financing and organizing asset sales to fund the
deal while battling activist investor Carl Icahn, who wants to replace four
Occidental directors and influence the pace of the company’s asset sales.
Hollub avoided her own shareholder vote on the deal by securing a
controversial and pricey USD10 billion financing agreement with Warren Buffett’s
Berkshire Hathaway. Icahn likened the deal to “taking candy from a baby” on
Buffett’s part.
Occidental this week sold USD13 billion in bonds to help fund the Anadarko
purchase and has proposed selling Anadarko’s Africa assets to Total SA.
It also formed a drilling partnership with Colombia’s state-run oil company
Ecopetrol SA to develop part of its Permian shale field for up to USD1.5
billion.
Occidental last week reported a 14% drop in second quarter profit, as costs
related to the deal and weaker chemical earnings hit its bottom line. |
