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06/22/2005:

"China's CNOOC to launch 19 billion dollar bid for Unocal: newspaper"

NEW YORK (AFP) - China National Offshore Oil Corp. (CNOOC) has agreed to launch the biggest ever takeover offer by a Chinese group with a 19 billion dollar bid for US oil major Unocal, according to a report.

The decision to trump a rival bid for Unocal by ChevronTexaco was reached by CNOOC directors in a tense six-hour board meeting held in Beijing on Wednesday, The Financial Times said in its online edition.

It quoted people close to the situation as saying CNOOC had decided to bid about 67 dollars a share for Unocal and would offer to take on 1.6 billion dollars of the US energy group's debt.

At that level, the offer would value Unocal at 19.8 billion dollars, the newspaper said.

It would be higher than Chevron's cash-and-shares offer of 16.4 billion dollars plus debt, and represent a modest premium to Unocal's share price, which closed in New York Wednesday at 64.86 dollars.

If successful, it would represent the biggest overseas acquisition by a Chinese company, dwarfing the Lenovo Group's recent 1.25 billion dollar takeover of IBM's personal computer business.

But the FT quoted New York bankers as saying that CNOOC will have a difficult task persuading investors that its offer is high enough to compensate for any risk that the deal might be blocked by US regulators.

"CNOOC will have serious difficulties closing this deal given legal, bureaucratic and political barriers," Robin West, chairman of PFC Energy, a Washington consultancy, told the newspaper.

CNOOC, China's third-largest oil group, confirmed in a statement to the Hong Kong Stock Exchange earlier this month that it was considering launching a possible bid for Unocal.

It said a further announcement would be made "if and when appropriate."

If CNOOC were to go ahead with an attempt to take over Unocal, it would fit into a larger Chinese strategy of securing access to energy sources overseas for the country's power-hungry industries.

Unocal has gas and oil reserves in Thailand, Indonesia and Central Asia. It has more than 6,000 employees, with most of its activities in Asia and North America. It has no refining or marketing operations.

ChevronTexaco, the number-two US oil company, announced its takeover bid for Unocal in April. The bid received US regulatory approval on June 10.
Full: news.yahoo.com

Unocal is the big player in Afghanistan and Central Asia.