Unocal: Cnooc Sought Unocal To Pay Chevron Breakup Fee

(MORE TO FOLLOW) Dow Jones Newswires

August 03, 2005 15:42 ET

Unocal: Cnooc Discussed Possibility Of $69/Shr Offer

WASHINGTON (Dow Jones)–Unocal Corp. (UCL) disclosed Wednesday it had discussed a $69 a share offer with China’s Cnooc Ltd. (CEO) before Cnooc dropped its bid to acquire the oil producer on Tuesday.

Cnooc’s move to drop its bid means rival bidder Chevron Corp. (CVX) now stands poised to acquire Unocal after a vote by Unocal’s shareholders on Aug. 10.

(MORE TO FOLLOW) Dow Jones Newswires

August 03, 2005 16:58 ET

Unocal: Cnooc Discussed Possibility Of $69/Shr Offer -2-

Chevron’s offer is a mix of 60% stock and 40% cash: stock at 1.03 shares of Chevron stock for each Unocal share and cash of $69 per Unocal share.

Although Cnooc and Unocal discussed an offer of $69 a share, Cnooc declined to increase its bid above $67 a share, Unocal said in a Securities and Exchange Commission filing.

Unocal said the $69 a share offer it discussed with Cnooc came with several conditions, including that Unocal, not Cnooc, pay a breakup fee with Chevron.

Unocal said other conditions Cnooc sought included that Unocal support Cnooc’s bid in all forums, even though that would result in breach of Unocal’s agreement with Chevron, and that Unocal’s board change its recommendation in favor of Cnooc’s bid.

Unocal also said its board was “willing to accept the additional risks and complexities of a Cnooc transaction if the price offered had been sufficient to compensate (Unocal) stockholders for the additional risks.”

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