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Unocal Board Backs Revised Chevron Bid

Unocal Board Backs Revised Chevron Bid
Wednesday July 20, 2:57 am ET
By Laura Wides, Associated Press Writer
Unocal Board Recommends Shareholders Accept Revised Chevron Bid

LOS ANGELES (AP) -- Unocal's board of directors Tuesday recommended that its shareholders accept a last-minute, $17 billion merger bid from Chevron, rejecting a higher offer from China's third-largest oil company.

Chevron boosted its offer by $2 per share shortly before the Unocal board met Tuesday night, raising its bid to $63 per share or more than $17 billion. It originally bid about $16.6 billion.

"Our increased offer has been driven by competitive circumstances, but even at this higher price it remains a compelling transaction for Chevron stockholders," Chevron Chairman and CEO David J. O'Reilly said in a statement late Tuesday.

Hours later, Unocal's board of directors recommended the company's stockholders vote in favor of adopting the amended merger at their Aug. 10 meeting.

CNOOC Ltd., a Hong Kong subsidiary of state-owned China National Offshore Oil Corp., has offered to pay $18.2 billion for El Segundo, Calif.-based Unocal, the ninth biggest U.S. oil company.

But American politicians have warned that CNOOC's effort could pose risks to U.S. national security and called for a full review by the Bush administration. The Chinese company's officials have welcomed a security review and denied that CNOOC was acting on behalf of China's government, which is in the midst of a multibillion-dollar campaign to secure foreign oil and gas supplies to power its booming economy.

Chevron explores for, refines and transports crude oil and gas. Unocal's operations are in exploration and production of crude oil and natural gas, with no refineries or gasoline stations. Together the two companies have over 11 percent of U.S. crude oil production.

Unocal Inc.: http://www.unocal.com/

CNOOC Ltd.: http://www.cnoocltd.com/

Chevron Corp.: http://www.chevron.com


LINK: http://biz.yahoo.com/ap/050720/unocal.html?.v=5