Anadarko Petroleum Drops Offer For Rival
November 12 2015 - 2:02AM
Dow Jones News
(FROM THE WALL STREET JOURNAL 11/12/15)
By Tess Stynes
Anadarko Petroleum Corp.'s chief executive said on Wednesday
that the oil-and-gas company recently made a preliminary offer for
rival Apache Corp. but has since withdrawn it.
Anadarko didn't disclose the size of its bid, saying only that
it reflected a modest premium and consisted of all stock.
Apache had a market value of about $20 billion as of Tuesday's
close.
Anadarko chief Al Walker said in prepared remarks that efforts
to reach a confidentiality agreement to explore a possible deal
were rejected by Apache, and no substantial talks between the two
Houston-based companies took place.
An Apache spokesman declined to comment.
Apache shares, which had climbed 12% earlier this week on deal
speculation, fell 7.3% to $49.40 on Wednesday. Anadarko shares
dropped 3.8% to $61.01.
Mr. Walker said his company was unwilling to pursue the
transaction without access to detailed nonpublic information and
said its analysis suggests Apache trades at or near full value.
RBC analysts, however, said earlier this week that Apache shares
were still relatively undervalued, despite rising more than 40%
from September's lows and speculated that the company wouldn't
agree to a buyout unless the bid far exceeded its current share
price. The investment bank also said Apache's management didn't
appear to be in any hurry to sell.
"Apache has one of the stronger balance sheets in the
[exploration and production] sector with $1.8B of working capital
and an undrawn $3.5B revolver," the analysts wrote, adding that the
company is positioned to wait out the current weakness in energy
prices. "There is no need for them to pursue a sale of the company
at this time," they said.
Apache last week raised its production outlook, while reporting
third-quarter results that weren't as bad as analysts had expected.
However, its bottom line was hurt by billions of dollars in
write-downs driven by low oil and gas prices, leading to a loss of
$5.66 billion.
Like many other U.S. oil producers, Apache has cut back on
drilling rigs and delayed well completions.
For its part, Anadarko last month reported that it swung to a
$2.24 billion loss in its third quarter amid hefty write-downs and
a drop in revenue.
The oil-and-gas exploration and production company has been hurt
by the tumble in crude prices over the past 15 months.
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(END) Dow Jones Newswires
November 12, 2015 02:47 ET (07:47 GMT)
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