Occidental Petroleum’s Vicki Hollub defended her $38 billion pursuit of Anadarko Petroleum as she and eight other company directors faced a shareholder vote that turned into a proxy referendum on the deal.
Ms Hollub and the other directors were re-elected by margins ranging from 70 per cent to 82 per cent on Friday as investors who normally vote 99 per cent in favor of board members registered displeasure at the Anadarko deal sealed a day earlier.
“We are the rightful owner” of Anadarko, Ms Hollub said at Occidental’s annual general meeting in Houston. “We’ll get more out of those assets than any of our competitors.”
The Anadarko deal will make Occidental far and away the biggest crude producer in the Permian Basin, an oil field that’s been pumping crude for a century and has been rejuvenated by the shale revolution.
Ms Hollub is paying up, though: a $10bn cash infusion from Warren Buffett and additional debt will stretch Occidental’s finances at a time when investors are demanding more spending discipline. The company also secured a $21.8 bn bridge loan from Bank of America and Citigroup to help finance the takeover, according to a filing on Friday.
“I’m happy with Warren Buffett for being there,” said Ms Hollub, who met with the billionaire for 90 minutes last month to negotiate investment terms. “The timing was critical for us to get this deal when we did.”
Under terms of the definitive agreement announced late Thursday, Anadarko is on the hook for a $1bn breakup fee if it backs out. If Occidental walks away, it must reimburse Anadarko for the $1bn Chevron received after the California-based oil giant bowed out of the bidding war.
While the proposed acquisition didn’t require formal shareholder approval, some investors - including T. Towe Price - indicated they would register their displeasure by voting against the re-election of Ms Hollub and other directors. Another indication of investor unease was approval at Friday’s meeting of a proposal that will make it easier for shareholders to summon a special meeting.
Occidental’s stock extended losses for a second day, dropping as much as 2.6 per cent on Friday to a 10-year low. A day earlier, rival Chevron acquiesced and decided not to match or beat Occidental’s price for Anadarko. The pressure is now on Ms Hollub and her team to deliver the $3.5bn in cost cuts and savings she promised.
At Friday’s meeting in Houston, Ms Hollub presented a 15 minute video about the company’s 2018 exploits and then went off script and addressed reporters sitting at the back of the conference room.
“What you should know is I’m an engineer: my experience with M&A is very limited,” said Ms Hollub, 59, who has spent her entire career at Occidental.
She then proceeded to introduce her “M&A dream team” by name and detailed their roles in the transaction. Senior vice president Oscar Brown received a special mention for accompanying Ms Hollub on trips to to Omaha and Paris for meetings with Mr Buffett and executives at Total, respectively.
“TV has confused determination with desperation,” she said. “We approached this deal from a position of strength.”
Company%20Profile
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More from Rashmee Roshan Lall
Killing of Qassem Suleimani
Remaining fixtures
- August 29 – UAE v Saudi Arabia, Hazza bin Zayed Stadium, Al Ain
- September 5 – Iraq v UAE, Amman, Jordan (venue TBC)
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
5 of the most-popular Airbnb locations in Dubai
Bobby Grudziecki, chief operating officer of Frank Porter, identifies the five most popular areas in Dubai for those looking to make the most out of their properties and the rates owners can secure:
• Dubai Marina
The Marina and Jumeirah Beach Residence are popular locations, says Mr Grudziecki, due to their closeness to the beach, restaurants and hotels.
Frank Porter’s average Airbnb rent:
One bedroom: Dh482 to Dh739
Two bedroom: Dh627 to Dh960
Three bedroom: Dh721 to Dh1,104
• Downtown
Within walking distance of the Dubai Mall, Burj Khalifa and the famous fountains, this location combines business and leisure. “Sure it’s for tourists,” says Mr Grudziecki. “Though Downtown [still caters to business people] because it’s close to Dubai International Financial Centre."
Frank Porter’s average Airbnb rent:
One bedroom: Dh497 to Dh772
Two bedroom: Dh646 to Dh1,003
Three bedroom: Dh743 to Dh1,154
• City Walk
The rising star of the Dubai property market, this area is lined with pristine sidewalks, boutiques and cafes and close to the new entertainment venue Coca Cola Arena. “Downtown and Marina are pretty much the same prices,” Mr Grudziecki says, “but City Walk is higher.”
Frank Porter’s average Airbnb rent:
One bedroom: Dh524 to Dh809
Two bedroom: Dh682 to Dh1,052
Three bedroom: Dh784 to Dh1,210
• Jumeirah Lake Towers
Dubai Marina’s little brother JLT resides on the other side of Sheikh Zayed road but is still close enough to beachside outlets and attractions. The big selling point for Airbnb renters, however, is that “it’s cheaper than Dubai Marina”, Mr Grudziecki says.
Frank Porter’s average Airbnb rent:
One bedroom: Dh422 to Dh629
Two bedroom: Dh549 to Dh818
Three bedroom: Dh631 to Dh941
• Palm Jumeirah
Palm Jumeirah's proximity to luxury resorts is attractive, especially for big families, says Mr Grudziecki, as Airbnb renters can secure competitive rates on one of the world’s most famous tourist destinations.
Frank Porter’s average Airbnb rent:
One bedroom: Dh503 to Dh770
Two bedroom: Dh654 to Dh1,002
Three bedroom: Dh752 to Dh1,152
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
EXPATS
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Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
The Lowdown
Us
Director: Jordan Peele
Starring: Lupita Nyong'o, Winston Duke, Shahadi Wright Joseqph, Evan Alex and Elisabeth Moss
Rating: 4/5
COMPANY PROFILE
Name: Grubtech
Founders: Mohamed Al Fayed and Mohammed Hammedi
Launched: October 2019
Employees: 50
Financing stage: Seed round (raised $2 million)
Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
UAE currency: the story behind the money in your pockets
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
- Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
Juventus v Napoli, Sunday, 10.45pm (UAE)
Match on Bein Sports
