Oxy gets $10B influx from Berkshire Hathaway for Anadarko bid

[thackney]

Oxy gets $10B influx from Berkshire Hathaway for Anadarko bid
https://www.chron.com/business/energy/article/Oxy-gets-10B-influx-from-Berkshire-Hathaway-for-13806511.php
April 30, 2019

Occidental Petroleum's leverage in the operatic bidding war with Chevron to acquire Anadarko Petroleum gained significant strength with a $10 billion influx of cash from business magnate Warren Buffett's Brkshire Hathaway firm.

Houston's Occidental said Tuesday it is teaming up with one of the world's richest men to assuage the concerns of nervous investors and to keep Oxy from leaning too much on debt in its takeover bid for The Woodlands-based Anadarko.

After Anadarko initially spurned Oxy in favor of Chevron's $33 billion offer at $65 a share - arguing that Chevron was a better fit with safer long-term value - Oxy has comeback to offer more cash in its $38 billion bid at $76 per share.

Anadarko's board of directors is currently reviewing Oxy's offer that it has deemed potentially superior.

Anadarko also is waiting to see if Chevron will increase its offer. Anadarko would have to pay Chevron a $1 billion breakup fee if it pulls out of its current deal. Chevron would only reiterate Tuesday that its standing offer has the best overall value and most certainty....

[IsailedawayfromFR]

Point, set, match Oxy

[thackney]

Point, set, match Oxy

I cannot help but wonder if this didn't help Chevron more.

Simply keep your original offer.  If Anadarko goes to someone else, they get $1 Billion for doing very little. 

[IsailedawayfromFR]

I cannot help but wonder if this didn't help Chevron more.

Simply keep your original offer.  If Anadarko goes to someone else, they get $1 Billion for doing very little.

that is certainly one point of view.

Did it help or hurt Pennzoil when Getty spurned its offer and went to Texaco?

[thackney]

that is certainly one point of view.

Did it help or hurt Pennzoil when Getty spurned its offer and went to Texaco?

Did Pennzoil get paid a Billion dollars?

[IsailedawayfromFR]

Did Pennzoil get paid a Billion dollars?

No.

They got a $10.5 bn judgement against Texaco that forced Texaco into bankruptcy.

Texaco wound up paying Pennzoil $3bn, with 10% going to its attorney Joe Jamail, who bought UT's field name with it.

[thackney]

No.

They got a $10.5 bn judgement against Texaco that forced Texaco into bankruptcy.

Texaco wound up paying Pennzoil $3bn, with 10% going to its attorney Joe Jamail, who bought UT's field name with it.

Thanks

Did it help or hurt Pennzoil when Getty spurned its offer and went to Texaco?

Sounds like it helped in the end.

[IsailedawayfromFR]

Thanks

Sounds like it helped in the end.

both Pennzoil and Texaco are no more.

I worked at Texaco HQ during the fiasco

Certainly helped Joe Jamail though.

[thackney]

both Pennzoil and Texaco are no more.

I worked at Texaco HQ during the fiasco

Certainly helped Joe Jamail though.

Mergers and acquisitions are part of life in the oil business.  Are you suggesting the $3 billion settlement to Pennzoil did them in?  It was over a decade later when they merged with Quaker, then later bought by Devon and finally bought by Shell.

Texaco made a lot of mistakes at that time.  Mistakes in both the dealing and the trial.

http://www.fundinguniverse.com/company-histories/pennzoil-quaker-state-company-history/

[corbe]

   @IsailedawayfromFR I was between jobs in Houston and took a temp programming job at Getty Oil. I went on to work at Texaco for another 8 years (Downtown Fannin & Rusk then their new data center behind the Astrodome, then Nawlins).
    No regrets, though I was rooting for Pennzoil throughout that entire sordid process.

[IsailedawayfromFR]

   @IsailedawayfromFR I was between jobs in Houston and took a temp programming job at Getty Oil. I went on to work at Texaco for another 8 years (Downtown Fannin & Rusk then their new data center behind the Astrodome, then Nawlins).
    No regrets, though I was rooting for Pennzoil throughout that entire sordid process.

I do hope you have no ill effects from the stint at Rusk.

Building later sat unused for years as it was heavily contaminated with asbestos.

I can tell you stories on the Pennzoil deal.  Texaco lost to them as it sent down a bunch of Ivy League lawyers to go up against Texan Jamail in front of an all-Texan jury.   

@corbe

[IsailedawayfromFR]

Mergers and acquisitions are part of life in the oil business.  Are you suggesting the $3 billion settlement to Pennzoil did them in?  It was over a decade later when they merged with Quaker, then later bought by Devon and finally bought by Shell.

Texaco made a lot of mistakes at that time.  Mistakes in both the dealing and the trial.

http://www.fundinguniverse.com/company-histories/pennzoil-quaker-state-company-history/

no, that did not do them in, although I recall the flush of cash it got was invested into some bad business decisions.

[corbe]

I do hope you have no ill effects from the stint at Rusk.

Building later sat unused for years as it was heavily contaminated with asbestos.

I can tell you stories on the Pennzoil deal.  Texaco lost to them as it sent down a bunch of Ivy League lawyers to go up against Texan Jamail in front of an all-Texan jury.   

@corbe

   @IsailedawayfromFR
  I worked the weekends at Rusk (3~12 hour shifts, database maintenance) as the winos drank their urine in the parking garage across the street and died.  The 'O'riginal (rat/roach infested) Coney Island a block away on Fannin was a huge plus, met ZZTop there one weekend.  On the weekends all the workers were there removing the Asbestos, couldn't even use the restrooms on our floor (7, I believe).  It was good times, wouldn't change it for nothing.  Did 10 years at Shell prior, they were the ones that had the Data Center near the Astrodome, not Texaco (old age moment). Texaco eventually moved us to a new data center off Bellaire, bought a house there sold it after my Divorce, lost my azz (Houston Oil Bust) and transferred to Poydras St, Nawlins, another beautiful experience.

[IsailedawayfromFR]

   @IsailedawayfromFR
  I worked the weekends at Rusk (3~12 hour shifts, database maintenance) as the winos drank their urine in the parking garage across the street and died.  The 'O'riginal (rat/roach infested) Coney Island a block away on Fannin was a huge plus, met ZZTop there one weekend.  On the weekends all the workers were there removing the Asbestos, couldn't even use the restrooms on our floor (7, I believe).  It was good times, wouldn't change it for nothing.  Did 10 years at Shell prior, they were the ones that had the Data Center near the Astrodome, not Texaco (old age moment). Texaco eventually moved us to a new data center off Bellaire, bought a house there sold it after my Divorce, lost my azz (Houston Oil Bust) and transferred to Poydras St, Nawlins, another beautiful experience.

you and I had a lot in common.

I worked at the Bellaire bldg in the 70s, as well a few months at Rusk.  Before I retired lived a couple of blocks from Shell research along Bellaire(torn down and now occupied by condos).  Also worked during 90s along Poydras for Texaco and Exxon.  I still miss that good food. @corbe

[Elderberry]

Y'all had it just as bad as the Space Biz. I went from Ford Aero to SDC to SDC/Burrows to Unisys to Loral to Lockheed to Lockheed/Martin and left before Leidos picked up our portion of the bizness.

[thackney]

Y'all had it just as bad as the Space Biz. I went from Ford Aero to SDC to SDC/Burrows to Unisys to Loral to Lockheed to Lockheed/Martin and left before Leidos picked up our portion of the bizness.

After 30 years, I'm in my first job lasting more than 3 years.  6 years now...

But that is not just layoffs; I spent quite a while chasing big pipeline jobs, moving on to be lead at the next big one.  I often came back to the same place when they landed another one.

[IsailedawayfromFR]

Y'all had it just as bad as the Space Biz. I went from Ford Aero to SDC to SDC/Burrows to Unisys to Loral to Lockheed to Lockheed/Martin and left before Leidos picked up our portion of the bizness.

yeah, for me it could have been worse pursuing aerospace engineering at A&M instead of petroleum engineering at UT.

I thank God I became a longhorn

[Hoodat]

Where does Texas Tech fall into the equation?

btw, I think Chevron will win out.

[IsailedawayfromFR]

Where does Texas Tech fall into the equation?

btw, I think Chevron will win out.

great basketball team.  Engineering school good too.

CVX will get skunked by the state of California

[thackney]

Moody's likely to downgrade Oxy if it wins Anadarko
https://www.chron.com/business/energy/article/Moody-s-likely-to-downgrade-Oxy-if-it-wins-13828717.php
May 8, 2019

Occidental Petroleum likely will receive a downgraded investment rating if it wins the bidding war against the much larger Chevron to acquire Anadarko Petroleum, the debt rating agency Moody's Investors Service said Wednesday.

Houston-based Oxy would have to accumulate too much additional debt if it buys The Woodlands oil and gas producer Anadarko for about $38 billion, said Moody's Vice President Andrew Brooks.

The unhealthy debt load comes even though Oxy would mitigate the debt somewhat with a $10 billion financing commitment from Warren Buffett's Berkshire Hathaway firm and by selling Anadarko's Africa assets for $8.8 billion to the French energy major Total....

[IsailedawayfromFR]

Moody's likely to downgrade Oxy if it wins Anadarko
https://www.chron.com/business/energy/article/Moody-s-likely-to-downgrade-Oxy-if-it-wins-13828717.php
May 8, 2019

Occidental Petroleum likely will receive a downgraded investment rating if it wins the bidding war against the much larger Chevron to acquire Anadarko Petroleum, the debt rating agency Moody's Investors Service said Wednesday.

Houston-based Oxy would have to accumulate too much additional debt if it buys The Woodlands oil and gas producer Anadarko for about $38 billion, said Moody's Vice President Andrew Brooks.

The unhealthy debt load comes even though Oxy would mitigate the debt somewhat with a $10 billion financing commitment from Warren Buffett's Berkshire Hathaway firm and by selling Anadarko's Africa assets for $8.8 billion to the French energy major Total....

Yep, it is not good to overbid. 

Oxy is known for creating what it is now via astute acquisitions of THUMS, Altura and Elk Hills 20 years ago.  All for less than $8.5bn

The purchase of Anadarko is not a particularly good one for the price agreed to.

But it does need a new home, and some fancy Woodlands digs are beckoning.