Tuesday, August 02, 2005
LexisNexis(TM) Academic - Document
LexisNexis(TM) Academic - DocumentCopyright 2005 The Financial Times Limited
Financial Times (London, England)
July 28, 2005 Thursday
USA Edition 2
SECTION: FRONT PAGE - COMPANIES & MARKETS; Pg. 15
LENGTH: 440 words
HEADLINE: CNOOC in Unocal sale pledge
BYLINE: By STEPHANIE KIRCHGAESSNER, SHEILA MCNULTY and JAMES POLITI
DATELINE: NEW YORK, WASHINGTON and HOUSTON
BODY:
* Chinese energy group says it may sell all takeover target's US assets to ease deal
* Investors urged to accept Chevron's rival offer
CNOOC was yesterday consid-ering a pledge to sell all Unocal's US assets, including valuable deep-water drilling operations in the Gulf of Mexico, to damp criticism of its proposed acquisition of the California-based company among US lawmakers.
The Chinese energy group has already agreed to divest any assets required by the committee on foreign investment in the US - the US government panel that would review its purchase of Unocal on national security grounds.
But after a series of setbacks in Washington, including a congressional amendment this week that would delay the government review by as long as 51 days, CNOOC was feeling pressure to make additional concessions, according to people familiar with the matter.
Although a pledge to sell all the US assets could come in the next few days, insiders cautioned that no decision had been made by Fu Chengyu, CNOOC's chief executive. CNOOC, which is mainly interested in Unocal's extensive Asian assets, has recently been contacted by a number of potential buyers of the US portfolio, which could be worth in excess of Dollars 5bn.
Interested parties include Kerr-McGee, Occidental, Apache and others, as well as private equity groups, according to people close to situation.
In the meantime, Unocal appears to be reaffirming its commitment to an agreed deal with Chevron. Executives from both companies will today begin meeting Unocal shareholders to encourage investors to support the Dollars 17bn Chevron deal ahead of an August 10 vote on the transaction.
In coming days CNOOC is expected to choose between raising its bid above the existing Dollars 67 a share - or Dollars 18.5bn - walking away from the bidding, or launching a hostile offer.
A pledge to sell Unocal's US assets could help CNOOC persuade Unocal's board to accept an offer for the company on grounds that it would reduce the regulatory risk. This is because such a move would make it more difficult for CFIUS to recommend the deal be blocked. But it would not automatically give the deal a green light. CFIUS is likely still to review potentially sensitive technology transfers and other issues that could arise if CNOOC sealed a deal with Unocal.
A CFIUS expert said a promise by CNOOC to sell the assets would only sway critics of the deal if CNOOC were able to finalise a sale with a powerful US partner.
"To reduce the political bite, they would have to have a US company that is going to fight with them in Washington," the person said.
Additional reporting by Sheila McNulty in Houston
LOAD-DATE: July 27, 2005
Financial Times (London, England)
July 28, 2005 Thursday
USA Edition 2
SECTION: FRONT PAGE - COMPANIES & MARKETS; Pg. 15
LENGTH: 440 words
HEADLINE: CNOOC in Unocal sale pledge
BYLINE: By STEPHANIE KIRCHGAESSNER, SHEILA MCNULTY and JAMES POLITI
DATELINE: NEW YORK, WASHINGTON and HOUSTON
BODY:
* Chinese energy group says it may sell all takeover target's US assets to ease deal
* Investors urged to accept Chevron's rival offer
CNOOC was yesterday consid-ering a pledge to sell all Unocal's US assets, including valuable deep-water drilling operations in the Gulf of Mexico, to damp criticism of its proposed acquisition of the California-based company among US lawmakers.
The Chinese energy group has already agreed to divest any assets required by the committee on foreign investment in the US - the US government panel that would review its purchase of Unocal on national security grounds.
But after a series of setbacks in Washington, including a congressional amendment this week that would delay the government review by as long as 51 days, CNOOC was feeling pressure to make additional concessions, according to people familiar with the matter.
Although a pledge to sell all the US assets could come in the next few days, insiders cautioned that no decision had been made by Fu Chengyu, CNOOC's chief executive. CNOOC, which is mainly interested in Unocal's extensive Asian assets, has recently been contacted by a number of potential buyers of the US portfolio, which could be worth in excess of Dollars 5bn.
Interested parties include Kerr-McGee, Occidental, Apache and others, as well as private equity groups, according to people close to situation.
In the meantime, Unocal appears to be reaffirming its commitment to an agreed deal with Chevron. Executives from both companies will today begin meeting Unocal shareholders to encourage investors to support the Dollars 17bn Chevron deal ahead of an August 10 vote on the transaction.
In coming days CNOOC is expected to choose between raising its bid above the existing Dollars 67 a share - or Dollars 18.5bn - walking away from the bidding, or launching a hostile offer.
A pledge to sell Unocal's US assets could help CNOOC persuade Unocal's board to accept an offer for the company on grounds that it would reduce the regulatory risk. This is because such a move would make it more difficult for CFIUS to recommend the deal be blocked. But it would not automatically give the deal a green light. CFIUS is likely still to review potentially sensitive technology transfers and other issues that could arise if CNOOC sealed a deal with Unocal.
A CFIUS expert said a promise by CNOOC to sell the assets would only sway critics of the deal if CNOOC were able to finalise a sale with a powerful US partner.
"To reduce the political bite, they would have to have a US company that is going to fight with them in Washington," the person said.
Additional reporting by Sheila McNulty in Houston
LOAD-DATE: July 27, 2005
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