Anadarko to resume deal talks with Occidental, says bid could be ‘superior’ to Chevron’s offer

Anadarko Petroleum on Monday announced it will restart negotiations with Occidental, after striking a $33 billion deal earlier this month with Chevron to sell its business.

The decision comes after Anadarko’s board of directors unanimously determined that Occidental Petroleum‘s rival bid, launched last week, could reasonably lead to a proposal that is superior to Chevron’s previously announced deal to buy Anadarko.

Occidental has offered $76 a share for Anadarko, while Chevron has put $65 a share on the table.

The board’s determination allows Anadarko and its advisers to resume talks with Occidental under the terms of the Chevron deal. The agreement with Chevron remains in effect, and Anadarko’s board reaffirmed its support for the deal for the time being.

The announcement is the latest development in a rare bidding war in the oil and gas sector. At the heart of the battle are the crown jewels of Anadarko’s portfolio: a significant footprint in the Permian Basin, the top U.S. shale oil field.

Both Chevron and Occidental are seeking to expand their presence in the Permian, which stretches across western Texas and southeastern New Mexico. Occidental CEO Vicki Hollub told CNBC that Anadarko’s Permian assets represent about 75 percent of the deal value.

Occidental revealed last week that it had put forward three offers to buy Anadarko since late March. On Monday, Anadarko said the latest proposal “reflects significant improvement” in value, terms and conditions, and closing certainty compared to previous offers.

Anadarko stressed that its decision to restart negotiations with Occidental does not assure the talks will produce a deal that is superior to the agreement with Chevron. Anadarko would have to pay Chevron a $1 billion breakup fee if it decides to sell to Occidental.

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