China's CNOOC drops bid for Unocal

[swag]

http://www.msnbc.msn.com/id/8795682/


Updated: 9:26 a.m. ET Aug. 2, 2005
NEW YORK - China’s CNOOC Ltd. said Tuesday it has withdrawn its $18.5 billion cash offer for Unocal Corp., stating it considered raising its bid, and “would have done so but for the political environment in the U.S.”

CNOOC’s withdrawal frees the way for Chevron Corp. to clinch its $17.4 billion bid for El Segundo, Calif.-based Unocal.

Late last week, reports said Hong Kong-based CNOOC was trying to decide between raising its bid for Unocal to as much as $20 billion or to drop it entirely due to objections by critics who contend the acquisition might imperil U.S. energy security.

. . .

[Old and In the Way]

1. Did you catch the last paragraph in the article?

"The company said that the political environment created “a level of uncertainty that presents an unacceptable risk to our ability to secure this transaction.”"

Welcome to the United States of the Banana Republic!

[Turbineguy]

2. These idiots

had better watch it. The GOP Plan depends on the selling off of U.S. hard assets to ultimately finance the Bush Economic Miracle.

If they let on that these foreign owned assets could be nationalized, that's something that all those socialist losers do (Ayn Rand called them "looters").

Better stick with the Treasuries, backed by the full faith and (polluted) air.

[dmr]

3. Very interesting

With Henry Kissinger on the CNOOC advisory board and the lobbying/law firm of Akin Gump Strauss Hauer & Feld coldly dropping representation of Chevron for CNOOC, I wondered if the Bush* White House would intervene on behalf of China despite the nonpartisan issues with our energy / national security.

Here's another take on the pull out:

http://www.signonsandiego.com/news/business/20050802-1100-unocal.html

- snip -

CNOOC's ownership structure also raised hackles in Congress. The company is part of the China National Offshore Oil Corp., which is 70 percent owned by China's government – an arrangement that helped secure favorable financing terms unavailable to Chevron.

Raising concerns about the financing became a pivotal issue because it made it more difficult for CNOOC to raise its bid without fueling the perception that its offer was being bankrolled by a deep-pocketed government, Gheit said. "They didn't want to put even more fuel on that fire, so it became a tremendously uphill battle for them."

Despite the prickly politics, Unocal's board appeared poised to accept CNOOC's offer until Chevron agreed to sweeten its offer two weeks ago.

CNOOC' board had authorized a bid increase to $69 per share, but the company's chairman, Fu Chengyu, declined unless Unocal agreed to pay the $500 million fee that would have been owed to Chevron if its bid lost out. Unocal refused, and reaffirmed its commitment to Chevron.

[SoCalDem]

4. They will just find someone else to buy it and then sell it to China

:)