Chinese firm ups ante for Unocal
LOS ANGELES -- China's third-largest oil producer made an unsolicited $18.5 billion bid yesterday for oil and gas company Unocal Corp., which had already agreed to be acquired by Chevron Corp. for $16.6 billion.
Unocal acknowledged the offer from CNOOC Limited, an affiliate of China National Offshore Oil Corp., to buy the company for $67 per share in cash. El Segundo-based Unocal said it would evaluate the bid, but that its board's previous recommendation to shareholders to accept the Chevron offer remained in place.
Chevron offered in April to acquire Unocal in a deal that offered Unocal shareholders a choice of accepting $65 per share cash, 1.03 shares of Chevron stock, or a combination of stock and cash.
In a statement CNOOC Limited's chairman and chief executive, Fu Chengyu, called the bid ''friendly" and said it would be superior for Unocal shareholders.
''The deal is fully financed, subject to customary closing conditions, and priced in line with market values for comparable businesses," Fu said.
CNOOC said the deal would more than double its production and increase reserves by nearly 80 percent.
The company also noted that both it and Unocal have a significant presence in Asia. CNOOC estimated that 85 percent of the combined reserves of both companies are located in Asia and the Caspian region.
Chevron, based in San Ramon, Calif., reaffirmed its bid yesterday, saying its offer ''combines compelling value, regulatory certainty and accelerated timing, providing a superior transaction for Unocal stockholders."
Chevron also noted that the merger agreement has been approved by the boards of both companies and has received regulatory approval.
The Federal Trade Commission approved the Chevron-Unocal deal this month after Chevron promised not to enforce a patent on reformulated gasoline the FTC said could have increased gas prices in California by over half a billion dollars a year, or almost six cents a gallon.
The approval settled a two-year-old legal fight between Unocal and the FTC.
Shares of Unocal rose nearly 2 percent Tuesday on rumors that CNOOC was considering a bid. The stock rose 1 cent to close at $64.86 yesterday on the New York Stock Exchange, then rose 39 cents in after-hours trading.
