Unocal's board of directors on Tuesday recommended that its shareholders accept a last-minute, US$17 billion merger bid from Chevron, rejecting a higher offer from CNOOC Ltd, China's third-largest oil company.
Chevron boosted its offer by US$2 per share shortly before the Unocal board met on Tuesday night, raising its bid to US$63 per share or more than US$17 billion. The company originally bid about US$16.6 billion in April.
"Our increased offer has been driven by competitive circumstances, but even at this higher price it remains a compelling transaction for Chevron stockholders," Chevron Chairman and CEO David O'Reilly said in a statement late on Tuesday.
PHOTO: REUTERS
Hours later, Unocal's board of directors recommended the company's stockholders vote in favor of adopting the amended merger at their Aug. 10 meeting, according to a joint statement from Chevron and El Segundo, California-based Unocal.
CNOOC, a Hong Kong subsidiary of state-owned China National Offshore Oil Corp (
"The situation with us is that we have what we consider a clearly superior full-cash offer on the table, and it remains there," said CNOOC spokesman Ray Bashford in Hong Kong. "We're willing to continue negotiations."
US politicians have warned that CNOOC's effort could pose risks to national security and called for a full review by the Bush administration. The Chinese company's officials have welcomed a security review and denied that CNOOC was acting on behalf of China's government, which is in the midst of a multibillion-dollar campaign to secure foreign oil and gas supplies to power its booming economy.
Separately, Chinese appliance manufacturer Haier America and two investment partners are ending their bid to buy rival Maytag Corp.
Maytag said in a statement late on Tuesday that Haier America, a subsidiary of Haier Group Ltd (
Haier's decision to drop its bid came just two days after rival appliance maker Whirlpool Corp also jumped into the bidding for Maytag with a US$1.37 billion offer.
Newton, Iowa-based Maytag disclosed last month it was considering a preliminary US$1.28 billion bid from Haier America and the investment firms that valued Maytag at US$16 per share. Haier Group is China's largest appliance manufacturer, producing laundry machines, refrigerators, dishwashers and small appliances.
The offer from Michigan-based Whirlpool, the nation's largest appliance maker, values Maytag stock at US$17 per share.
The move ends the prospect of a three-way battle for Maytag. In May, Maytag's board accepted a US$14-a-share proposal from an investment group, Triton Acquisition Holding Co, led by Ripplewood Holdings LLC.
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