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4/29/2019, 1:45 PM (Source: TeleTrader)
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Occidental falls before bell on Anadarko bid

Analysts at Jefferies downgraded Occidental Petroleum Corp. on Monday to hold from buy before the Anadarko Petroleum Corp. acknowledged it would return to the table as it found the peer's takeover bid is a significant improvement from the deal it struck with Chevron Corp. The price target was lowered to $66 from $74 per share. Occidental dropped more than 2.5% in the premarket after the formal announcement, which matched earlier media reports. Anadarko was little changed, moving along the flat line at $72.8 per share and Chevron was just 0.09% lower at $117.1 per share.

The hydrocarbon explorer and operator of refineries was placed under review with negative implications at Fitch Ratings and S&P Global following the offer made on April 24. Fitch warned the transaction, valuing Anadarko at $57 billion in total, has a high cash portion, 50%, and that it would require raising debt and sales of assets worth up to $15 billion. Occidental's long-term grade is A, as is the senior unsecured rating, while short-term issuer default level is F1.

At S&P, it has issuer credit and senior unsecured ratings at A, with an A-1 short-term grade, placed under credit watch also with regard to debt concerns. The downgrade could be up to two notches, analysts have said.

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