Unocal endorses Chevron bid
by Brian Turner
US oil company Unocal has endorsed Chevron’s bid to buy the California-based company over a higher bid from Chinese company CNOOC.
Conventional wisdom is that Unocal is sticking with the Chevron deal at least partly because of concerns that the US government would not approve a deal with CNOOC.
The move by the Unocal board came after Chevron raised its bid from $60 per share to $63.01 per share, or $17 billion dollars.
This sets the stage for CNOOC to raise its from its current $67 dollars per share in an effort to get Unocal to change its mind.
CNOOC had been “comfortable” with its current bid of $18.5 billion, as CNOOC had expected Chevron to raise its bid by more than it did.
There is some concern that if it raises its bid, CNOOC would be eliminating any advantage to shareholders, and especially to minority shareholders, that the deal might bring. One fund has already sold its stake in the company as a result of these worries.
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