China's CNOOC mulling next move in Unocal takeover
China's CNOOC mulling next move in Unocal takeover
CNOOC is battling to keep alive its attempt to buy Unocal as worries mount that US political opposition might force it to withdraw its US$18.5 billion offer, reports said on Monday.
The Financial Times, citing sources close to the deal, said the state-controlled Chinese company was likely to make a decision within the next 48 hours on what to do, with an announcement expected as early as Wednesday.
After four days of top level meetings, the newspaper said people close to the situation had denied reports that CNOOC had decided to abandon the biggest and most ambitious overseas takeover attempt by a Chinese company.
They said that an improved CNOOC bid of some $20 billion would likely be able to defeat Chevron's $17.3 billion offer but political opposition in Washington was a problem.
"Nothing has been decided but the chances of an increased bid are about 30 percent now," the newspaper said, quoting a source close to the negotiations.
"It is not a matter of having the money or the will, it is a question of whether the political situation is becoming untenable."
In a separate report, the Wall Street Journal said several people close to CNOOC believe it will abandon the takeover.
While the possibility CNOOC would sweeten its cash bid has yet to be ruled out, there is a far greater likelihood that it will dump its takeover attempt, the financial daily said.
"The odds right now don't look good," an adviser to CNOOC was quoted as saying.
"Realistically speaking, it's probably over."
A spokesman for CNOOC in Beijing refused to comment on the deal, only saying the company's position had "not changed yet."
U.S. politicians have attacked the bid by state-controlled CNOOC as a Chinese raid on U.S. oil assets and last week passed an amendment that would delay the completion of a CNOOC takeover by nearly two months.
For CNOOC, time is running out to convince Unocal shareholders to back its bid with investors expected to vote on Chevron's cash-and-shares offer on Aug. 10. -- AFP