After a prolonged period of deliberation, Unocal has broken the silence to reaffirm its endorsement of Chevron's takeover offer for the company after the US energy titan finally broke ranks to increase its buyout offer.
For the past few weeks Unocal has been trying to decide between a safe Chevron offer of $61 per share and a more controversial CNOOC bid of $67 per share. Chinese oil company CNOOC had hoped its higher offer would win the day.
However, a number of US regulatory hurdles have thus far hindered the Chinese firm’s takeover efforts, despite it tabling a higher bid than Chevron. Concerns over the implications of a Chinese firm buying a US oil company have been widely cited as a reason for Unocal’s reticence to accept the CNOOC bid.
Unocal’s dilemma appears to now be resolved as Chevron’s improved offer of $63 per share has put the US giant firmly in pole position to clinch the deal.
Analysts are predicting that CNOOC will have to top $70 per share to stay in the race. However, early indications suggest that an improved offer will not be forthcoming as the CNOOC board had previously authorized a maximum bid of only $69 per share.
CNOOC now has until the Unocal shareholders vote on the Chevron offer on August 10 to decide whether it wants to stay in the battle.