By OGJ editors
HOUSTON, July 20 -- Chevron Corp. raised its offer for Unocal Corp. to $63.01/share of Unocal, up from its previous $60/share offer in a complicated deal that is 40% cash and 60% Chevron stock.
The revised offer puts the value of the Chevron offer at about $17 billion, excluding the assumption of Unocal's net debt. The latest offer is estimated to be about 5% more than Chevron's original offer (OGJ, Apr. 11, 2005, p. 27).
If successful, the transaction would involve the largest union of US oil and gas companies since Conoco Corp. and Phillips Petroleum Co. merged in a $15 billion transaction in late 2002 (OGJ Online, Aug. 30, 2002).
The Unocal board recommends that Unocal shareholders accept the Chevron merger agreement, as amended, at an Aug. 10 special meeting.
Chevron's revised offer still is lower than a $67/share offer for Unocal from CNOOC Ltd. (OGJ, June 27, 2005, p. 25). Excluding the assumption of Unocal's net debt and a $500 million break-up fee to rival Chevron, CNOOC's offer totals about $18.5 billion.
The value of both offers vary with stock prices and with the value of Unocal's net debt, which is declining as Unocal experiences strong cash flow and completes the sale of its Canadian exploration and production assets, a Unocal spokesman said.
Pogo Producing Co. is buying Northrock Resources Ltd., a wholly owned Canadian subsidiary of Unocal for $1.8 billion (OGJ, July 18, 2005, p. 30).