Buoyant investors boosted Chevron’s stock on Thursday after the San Ramon headquartered company said that it would stick to its bid to buy Anadarko Petroleum Corp and expects the latter to terminate the merger deal.
Chevron is involved in a bidding war with Occidental Petroleum to purchase Anadarko Petroleum, and while Chevron quoted $33 billion, Occidental bid $38 billion, making it the clear winner unless Chevron decides to raise its bid by Friday. According to Chevron’s Chief Executive, the company would stick to its offer price of $70 per share which is almost 8.5 percent lower than Occidental’s latest offer of $76 per share. In spite of losing the bid, Chevron is earning a windfall of $1 billion under the terms of the agreement which states that if the merger deal does not go through, Anadarko would be required to pay the oil major a termination fee of a billion dollars.
Shares of Chevron (NYSE: CVX) surged more than 4-percent to $122.32 on Thursday before pulling back to $120.77, a rise of 2.75 percent from the previous day’s closing price while shares of Anadarko (NYSE: APC) were down 2.99 percent at $73.47 and Occidental Petroleum (NYSE: OXY) tumbled more than 6-percent to trade at $56.85.