I am surprised that no one has brought this up yet, but in addition to the financial train wreck VH got OXY into by buying APC, she literally did a hostile takeover from Chevron and stole APC right from under their nose. Does anyone else find this insane? Thinking from a business point of view, I doubt Chevron will ever do a deal with OXY again. This was a terrible call by VH since Chevron owns full sections of checkerboard minerals all over the Permian (they own the most minerals in the Permian of any oil company). There are so many places OXY will need to make a land deal with them in the future to core up acreage etc. and I doubt they will ever want to work with us again. Hostile takeovers are the ultimate F-you, so if I were Chevron's management I would have a company policy of no deals with OXY whatsoever, at least until VH and the rest of her minions resign/depart the company.
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No @5hcz, Oxy's first offer was not superior to Chevron's. Oxy's first offer was mostly a stock transition, and APC execs didn't value Oxy's shares, as they didn't think they were stable (a justifiable opinion based on subsequent events). Chevron's deal was superior, because of the cash portion of the transaction, along with more stable Chevron shares. That's why Oxy had to up their offer, bringing more cash to the table, from Buffet, bypassing the interests of our own shareholders. Plus, as stated in the notes (if you've ever read them), APC execs thought that Oxy was going to sweeten their offer, while they knew that Chevron would not. And that's exactly what happened.
APC execs played their cards right, and their shareholders, they themselves, and Chevron all walked away richer for it, at the painful expense of the buffoons we have up on 31.
Interesting how everyone is complaining about the hostile takeover of APC, but fail to mention that Oxy had given APC a superior deal, that their management did not take to shareholders, because the Oxy deal would pay their executives less than Chevrons deal would.. Oxy's deal was Better for shareholders than Chevron.
I'm pretty sure the two did not get along before Oxy's hostile takeover of APC.
https://www.nytimes.com/1997/10/07/business/us-oilfield-will-be-sold-to-occidental.html
https://www.latimes.com/archives/la-xpm-1999-nov-19-fi-35201-story.html
https://www.businessinsider.com/r-occidental-ceo-jokes-chevron-is-an-unsuitable-buyer-lifts-stock-2015-1
Seems like just another time Oxy got its way over Chevron.
From the Financial Times over the weekend:
Chevron walked away with a $1bn break-fee from Anadarko.
Since then, Occidental’s own market capitalisation — including Anadarko — has slumped to barely a third its value at the time of the deal. Chevron’s powder has remained dry. Could it be tempted back?
“We’ve moved on from that,” said Mr Wirth. “Deposited the cheque and moved on.”
All yall seem to forget that there are still a lot of LAPC still at Oxy and it s-cks. No one has done me any favors and in August its just going to get worse.
@1lrt, I disagree. If APC was still around today, in this crash and low price environment, we wouldn't be better off than many of us are now (at least most of us who left APC/Oxy with the severance). Yes, APC was great, but APC in this environment wouldn't be the same APC that we worked at. Those great years are gone, as it's a completely different world now. So I don't agree that "we were better off left alone to do our thing at APC." I am so very thankful for the acquisition, for Oxy, for VH, and RAW. I wish the best to everyone else.
@1utt
while things may have worked out for most of us, I think we were better off left alone to do our thing at APC.
Just because we were not kicked out on the sidewalk and we got a survival kit doesn't mean, given the choice, I was going to embark on this adventure on my own.
Had good time at APC and still beats the hell out of driving downtown (whenever that office opens) to make a living.
@1olx, I disagree with a few of your points. Many many APC employees are actually better off for what happened, and what RAW did. I'm not saying he was the best CEO, but he fulfilled his obligation to shareholders, and through the very strong COC, many APC employees have been very well taken care of. I for one received a life changing severance package, and ended up in a better and higher paying job at a great company, which is well situated to make it through this economic recession/depression. I know many other APC employees who can say similar things. I would not be in this situation without the APC acquisition or Oxy. APC wasn't ruined, it was the springboard to greater things for many of us. APC and this acquisition will end up being one of the greatest things to happen to me in my career. So I say a heartfelt THANK YOU to VH, Oxy, and RAW!
OP
The only hostility shown by VH and her minions (controllers?) on the EC was to OXY shareholders (now bagholders).
First, by borrowing $10 Billion from Berkshire -Hathaway (at 8% per year) simply to avoid a shareholder vote that she knew she would lose. Bad corporate governance!
Second, VH and the EC gave Berkshire-Hathaway discounted OXY shares to the tune of $200 million for the 1Q 2020 payment, diluting existing shareholders. Another hostility to shareholders because OXY couldn’t spare the cash.
If you look at the original OXY-APC M&A plan, it made no sense at all for OXY, especially for the final price.
All of OXY management are to blame for ruining BOTH OXY and APC. RAW and the APC EC acted like bandits to profit handsomely while abandoning all APC employees. Chazen gets the blame for picking VH as CEO. Icahn remains the a**hat he always was. OXY employees (outside of early VSPER’s) have been damaged the most.
The only reasonable group reputation left is CVX EC -led by CEO Mike Wirth - who refused to up the ante and collected a cool $1 Billion from OXY.
Even before the COVID -19 impact the OXY APC merger was a predictable train wreck! Apparently all the APC value was in the Permian Basin UC assets because OXY would be able to apply its superior technology to make better wells than APC. Perhaps so, but OXY’s Permian UC wells we’re - in aggregate - not making a profit even before the merger. That’s what you get for having a lying SOS accountant in charge.
Chevron was driving down the interstate, intent on staying in the APC acquisition lane, and was then run off the road by VH in another vehicle, who really wanted that lane. At first Chevron may have been upset, but as they finished their recovery driving through the median and getting back on the road, they looked in the rear view mirror. And there they saw VH being s—ed into a giant sinkhole, along with a whole bunch of other vehicles. MW wiped his brow, and breathed a sigh of relief, because even though he got some mud on his vehicle and threw it out of alignment, if he would have stayed in the APC acquisition lane, he would have joined those cars in the sinkhole. VH's arrogance only solidified her position heading into the depths of destruction. There's no anger anymore by Chevron, only relief.
Now Chevron has stopped their car, and they're peering down into the depths at the destruction of all of the other vehicles. MW has a rope, and will be willing and able to provide some assistance to VH and others...for a price.
I guess that’s true. I think it’s more just the arrogance that VH and OXY decided to take on Chevron a company 5x our size in the first place.
In hindsight, given the downturn and current crisis, Chevron is ecstatic that they didn't purchase APC, adding a mountain of unnecessary debt. And Oxy paid them $1 Billion for it. I'm sure they have no ill will towards us, and are extremely thankful to VH. I'll bet they're licking their chops to take advantage of us even more in the future. So I would say it could be quite the opposite!
Chevron received a billion dollars from the deal to do absolutely nothing. They’re ok.
Middle level manager from oxy comment below I see, LOL.
And that is why you would be out of business.