What to Do with Anadarko Stock Amid Competing Buyout Offers — May 6, 2019

by Crista Huff

April brought exciting news to the world of mergers & acquisitions, when Chevron (CVX) offered to buy Anadarko Petroleum (APC) for approximately $33 billion. As the sweaty palms of the CEOs were drying after the handshake agreement, Occidental Petroleum (OXY) surprised the market with a competing offer to buy Anadarko for $38 billion in cash and stock.

Suddenly, Anadarko management was forced to consider whether to accept the larger buyout offer from the less financially attractive company, or to accept the smaller buyout offer from the more financially attractive and much larger company.

With scant time to catch their collective breath, investors then learned that Warren Buffett, CEO of Berkshire Hathaway (BRK/A), offered $10 billion to Occidental Petroleum. Buffett proposed receiving preferred stock with an 8% yield and warrants (convertible into common shares of Occidental), in order to support Occidental’s potential purchase of Anadarko.

Follow the link to read the full article, originally posted at www.CabotWealth.com:

https://cabotwealth.com/daily/value-investing/anadarko-stock-competing-buyout-offers/

 

Happy investing!

 

Crista Huff

President

Goodfellow LLC

 

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