SAN RAMON, Calif. (AP) — Chevron won't increase its buyout offer for Anadarko, cutting short a potential bidding war with Occidental Petroleum.
Occidental challenged Chevron's initial bid last month, offering $57 billion in cash and stock, including debt and book value of non-controlling interest. Chevron's offer was worth about $50 billion by the same metric.
Occidental's bid gained momentum two weeks ago when Warren Buffett's Berkshire Hathaway said it would put up $10 billion in financing for Occidental.
Anadarko said earlier this week that its board determined Occidental Petroleum Corp.'s offer was superior.
Chevron Corp. said Thursday that it won't make a counteroffer and will let the four-day match period expire. It had until Friday to make a revised proposal or a new offer.
"Winning in any environment doesn't mean winning at any cost," Chevron Chairman and CEO Michael Wirth said in a statement. "Cost and capital discipline always matter, and we will not dilute our returns or erode value for our shareholders for the sake of doing a deal."
Anadarko Petroleum Corp. will have to pay a $1 billion fee for terminating its deal with Chevron.
Chevron said it plans to spend 25% more on share repurchases, up to $5 billion a year.
Shares of Chevron rose 3.2% before the market open, while Anadarko's stock declined 2.5%. Shares of Occidental Petroleum fell 5.4%.
Source: AP
