Anadarko Discloses Withdrawn Bid for Apache
12 November 2015 - 1:50AM
Dow Jones News
The chief executive of Anadarko Petroleum Corp. said the
oil-and-gas company recently made a preliminary offer for rival
Apache Corp. but has since withdrawn it.
The Houston oil-and-gas exploration and production company
didn't disclose the size of its bid but said it reflected a modest
premium and consisted of all stock. Apache had a market value of
about $20 billion as of Tuesday's close.
Anadarko CEO Al Walker said in prepared remarks that efforts to
reach a mutually acceptable confidentiality agreement with Apache
to explore a possible deal were rejected, and no substantial talks
took place.
An Apache spokesman wasn't immediately available to comment.
Apache shares dropped 6.5% to $49.85 in recent premarket trading
and had climbed 12% this week on deal speculation. Anadarko shares
rose 2.2% to $64.80.
Mr. Walker said the company was unwilling to pursue the
transaction without access to detailed non-public information and
said its analysis suggests Apache appears to trade at or near full
value.
RBC analysts, however, said earlier this week that Apache shares
are still relatively undervalued, despite rising more than 40% from
September's lows and speculated the company likely won't agree to a
buyout unless the bid is far above current share prices. The
investment bank also doesn't think the oil company's management is
in any hurry to sell.
"Apache has one of the stronger balance sheets in the E&P
sector with $1.8B of working capital and an undrawn $3.5B
revolver...APA has the ability to wait out the current weakness in
commodities. There is no need for them to pursue a sale of the
company at this time," the analysts said.
Apache last week raised its production guidance and reported a
loss that wasn't as deep as analysts had expected for the September
quarter. However, the bottom line was hurt by billions of dollars
in write-downs driven by low commodities prices.
Like many other U.S. energy companies hurt by tanking
commodities prices, Apache has cut back on drilling rigs and has
been delaying well completions.
For its part, Anadarko last month reported that it swung to a
$2.24 billion loss in its third quarter amid hefty write-downs and
a drop in revenue.
The company has been hurt by the tumble in crude prices over the
past 15 months.
Write to Tess Stynes at tess.stynes@wsj.com
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(END) Dow Jones Newswires
November 11, 2015 09:35 ET (14:35 GMT)
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