Liam Denning, Columnist

Chevron’s Discipline Has Many Useful Outcomes

Letting Oxy stretch for Anadarko bolsters its reputation and is good for the whole fracking sector.

May 9, 2019 at 4:33 PM UTC

Liam Denning is a Bloomberg Opinion columnist covering energy. A former banker, he edited the Wall Street Journal’s Heard on the Street column and wrote the Financial Times’s Lex column.

Still plenty in the tank.
Photographer: Joe Raedle/Getty Images North America

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It seems clear now why Anadarko Petroleum Corp. opted to first take Chevron Corp.’s takeover offer a month ago: It suspected Chevron would stick to its guns.

When Occidental Petroleum Corp., which prevailed Thursday after Chevron withdrew, first unveiled its own bid, it complained Anadarko’s board had ignored its higher offers. Anadarko, recognizing Oxy’s stock would be a weaker currency and that the bidder would require a shareholder vote, had reportedly sought extra measures, such as a collar to protect against an inevitable hit to Oxy’s share price, as well as a higher cash component. Chevron, with a bigger balance sheet and no need for a shareholder vote, offered more security.