Unocal and Chevron face investors

Unocal and Chevron began an effort on Thursday to convince shareholders that Chevron’s lower bid for the California-based Unocal is the best thing for both companies and shareholders.

Unocal argued that while CNOOC’s bid is higher, Chevron’s bid is superior because of the inevitable delays that would accompany an acceptance of the Chinese oil company’s bid.

It said that an acceptance of the CNOOC bid would lead to delays in the approval process as well as only limited possibilities for the recovery of damages if the deal were to fall through.

Even so, Unocal did not completely rule out acceptance of CNOOC’s offer if it were to include compensation for the increased risks and complexities inherent in its offer.

Speculation is high that CNOOC will indeed make a higher offer for Unocal. It is believed, however, that CNOOC is waiting until after the US Congress begins its August recess this Friday before deciding whether to raise its bid in any way.

CNOOC’s current offer stands at $67 per share, but it has the approval of its board of directors to raise the bid to $69 per share if necessary.

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