CNOOC still keen on Unocal, calls its bid "superior"

Unocal deal turns to be a detective story while contending parties throw down challenges to one another. After Chevron's increased offer worth $17 billion, or $63 a share in cash and stock, and Unocal's board voted to accept it, CNOOC Ltd. declared its bid for Unocal Corp. was still superior.

"We have what we consider a clearly superior full-cash offer on the table, and it remains there," said a CNOOC spokesman in Hong Kong who asked not to be identified further, reports the AP.

As The New York Times suppose, the decision by Unocal's board could end the takeover battle that has stirred significant debate in Washington about national security concerns and trade policies with China. Still, it is possible that CNOOC could return to the negotiating table with a higher bid, believes the newspaper.

Gideon Lo, an analyst with DBS Vickers Hong Kong Ltd, was quoted as saying by Bloomberg, that "Chevron's offer is probably high enough to force CNOOC to give up its bid." CNOOC will have to offer "at least 5 percent to 10 percent more, or Unocal will probably prefer" Chevron, believes Gideon Lo. Moreover, if CNOOC "continues to follow the bid, the market may react negatively," while CNOOC is already "offering too much," says the analyst.

CNOOC, a Hong Kong-based subsidiary of a Chinese state-owned oil company, is offering US$18.5 billion (Ђ14.2 billion) in cash for California-based Unocal, the ninth-largest U.S. oil company. Chevron is offering a mix of cash and shares.

Financial newspapers reported last week that the CNOOC board gave management authorization to raise its bid if necessary, but the company wouldn't confirm that.

CNOOC's board also reportedly agreed to pay the U.S. oil company's shareholders up to US$2.5 billion (Ђ1.9 billion) if it signs a takeover agreement but a deal isn't completed.

Earlier predicted, the Chinese could pay dearly for the deal.

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