China's CNOOC Ltd will consider raising its $18.5 billion takeover bid for U.S. oil producer Unocal, the Financial Times reported on Wednesday citing people familiar with the matter.
The paper said CNOOC's board was expected to approve changes to the bid, including giving management permission to raise the takeover offer above the $67 per share in cash already offered. CNOOC's bid tops a $16 billion offer from Chevron Corp, although it faces numerous regulatory and political hurdles.
Investor and analysts expect that Unocal will press Chevron to lift its offer or risk losing its support for the deal. The Unocal board is due to meet this week to discuss the takeover offers.
CNOOC rolls out ad campaign With a hearing in the U.S. Congress on Wednesday to discuss the national security implications of a Chinese oil company's bid for Unocal Corp., Hong Kong-based CNOOC Ltd. is rolling out an advertising campaign aimed at abating the fears of Washington insiders.
The print ads, which will appear in publications such as Congressional Quarterly, National Journal and Roll Call, among others, stress what CNOOC believes are "the facts" behind its $18.5 billion cash offer for Unocal, which already has a tentative agreement to be bought for $16 billion-plus by Chevron Corp.
In one ad, snippets from various newspaper articles and editorials are used to back up CNOOC's claims that its proposed takeover of Unocal does not pose threats to America's energy or national security.
In another, a man dressed in a home-plate umpire's uniform stands beneath the words, "I don't call it until I've seen it," and it implores readers to "learn the facts" before forming an opinion of the deal. The ad mentions CNOOC's previous pledges to protect the jobs of Unocal's American-based work force as well as its promise to keep the California-based company's oil in the U.S.
The House Armed Services Committee plans a hearing Wednesday on the proposed transaction.
Members of Congress have complained that CNOOC's bid for Unocal is part of a broader strategy by China to hoard energy supplies before they run out. Another concern is that the United States might unintentionally hand over technology or assets that have military value.
The House registered its discomfort last month by approving a resolution that asks the president for an immediate and thorough review if Unocal accepts CNOOC's offer.
On Tuesday, two senators asked U.S. Secretary of Commerce Carlos Gutierrez and Trade Representative Robert Portman to look into whether Beijing's financial backing of the deal violates World Trade Organization rules.
Sens. Kent Conrad and Jim Bunning said in a letter to the trade officials that roughly 80 percent of the $16 billion in outside financing that CNOOC needs will come in the form of no-interest or below-market-rate loans from state-owned entities, including banks and CNOOC's parent company.
Many others in Congress have also said CNOOC has an unfair advantage.
CNOOC Chairman Fu Chengyu denies that his company is acting on behalf of China's government. In addition, the company has said it is willing to shed assets and take other steps necessary to address national security concerns.
"I think it's going to be important until Congress goes out of session (later this month) that people start seeing the facts on this and not just the fantasies," said Mark Palmer, managing director of Public Strategies Inc., which is handling public relations for CNOOC in Washington and designed the ads.
Market Data 
Markets 
AI
