Anadarko backs Occidental's revised US$38b bid, pressuring Chevron to respond

[HOUSTON] Anadarko Petroleum's board on Monday backed a US$38 billion bid from Occidental Petroleum, adding pressure on rival Chevron to raise its offer or walk away from the takeover contest.

The decision capped a series of moves by Occidental to finance and quickly complete its US$38 billion deal after Anadarko balked at several earlier offers. Occidental received the board's endorsement after raising US$18.8 billion in cash pledges that allowed it to avoid a vote by its shareholders on the deal.

Chevron has four days to decide whether it wants to alter an existing merger agreement that Anadarko already accepted or make a new bid.

Anadarko said its board had unanimously determined that the revised Occidental proposal constitutes a "superior proposal" and that it intends to terminate the Chevron merger agreement, a decision that would see it pay Chevron a US$1 billion termination fee.

Chevron confirmed it had receive the notice of termination from Anadarko and declined further comment.

Occidental was unable to provide an immediate comment.

The change of heart came after Occidental increased the proportion of cash in its US$76 per share offer to 78 per cent cash and 22 per cent stock, removing a stock exchange requirement for the approval of Occidental's shareholders.

REUTERS