Unocal board recommends shareholders accept revised Chevron bid

LOS ANGELES (AP) _ Unocal's board of directors has endorsed a last-minute, $17 billion takeover bid from Chevron, rejecting a higher offer from one of China's state-owned oil companies. <br/><br/>The

Wednesday, July 20th 2005, 8:40 am

By: News On 6

LOS ANGELES (AP) _ Unocal's board of directors has endorsed a last-minute, $17 billion takeover bid from Chevron, rejecting a higher offer from one of China's state-owned oil companies.

The decision by Unocal's board late Tuesday could signal an end to China's most ambitious attempt yet to acquire an American corporation. The takeover battle also has sparked debate about U.S. security concerns with the communist nation.

Chevron boosted its offer by $2 per share shortly before the Unocal board met Tuesday night, raising its bid to $63 per share, or more than $17 billion. The company originally bid about $16.6 billion in April.

``Our increased offer has been driven by competitive circumstances, but even at this higher price it remains a compelling transaction for Chevron stockholders,'' Chevron Chairman and CEO David J. O'Reilly said in a statement late Tuesday.

Hours later, Unocal's board of directors recommended the company's stockholders vote to accept the amended bid at their Aug. 10 meeting, according to a joint statement from Chevron and El Segundo, Calif.-based Unocal.

CNOOC Ltd., a Hong Kong subsidiary of state-owned China National Offshore Oil Corp., said the company wasn't ready to abandon its $18.2 billion bid for Unocal, the ninth-biggest U.S. oil company.

``The situation with us is that we have what we consider a clearly superior full-cash offer on the table, and it remains there,'' said CNOOC spokesman Ray Bashford in Hong Kong. ``We're willing to continue negotiations.''

American politicians have warned that a takeover by CNOOC (pronounced SEE'-nook) could pose risks to U.S. security and called for a full review by the Bush administration. The Chinese company's officials have welcomed a security review and denied that CNOOC was acting on behalf of China's government, which is in the midst of a multibillion-dollar campaign to secure foreign oil and gas supplies to power its booming economy.

China is the world's third-biggest oil importer behind Japan and the United States.

Chevron Corp., based in San Ramon, Calif., explores for, refines and transports crude oil and gas. Unocal Inc.'s operations are in exploration and production of crude oil and natural gas, with no refineries or gasoline stations. Together the two companies account for more than 11 percent of U.S. crude oil production.