Dividends and Anadarko pressed for all cash offers

A couple of months ago the company Anadarko Petroleum was in play as it decided to merge with Chevron. It was a good deal, but Occidental Petroleum valued the assets of Anadarko. When the dust has settled Occidental Petroleum had won the Board’s approval. For public companies, what the Board did or did not do has to be filed with the securities regulators. Jennifer Hiller of Reuters read the filings and reported without a higher cash offer the Board expected investor opposition.

The prize the companies were expecting was over 250,000 acres in West Texas known as the Permain Basin.

Large fees were earned by Evercore Group $53 million; Goldman Sachs $53 million; Chevron receives $ 1 billion and the CEO of Anadarko will receive $98 million and the CFO $55 million.

The Board helped raise the offering from an all stock deal to $59 in cash and 0.29 Occidental Petroleum share for each share of Anadarko and shareholders will vote for the deal

As the price went up, assets not held in the US will be sold to Total for $8.8 billion dollars and Occidental Petroleum needs oil prices to go higher to pay off debt.

Linking to dividend paying stocks, the Board of Directors has similar concerns as small investors. Generate healthy cash flows to have profits to pay dividends. The numbers are just a little bigger than most smaller investors deal with

There are more questions than answers – till the next time to raising questions.

 

 

 

 

 

 

 

 

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