Red China Firm Bids To Buy UNOCAL Oil Company
Here we go again . . .
Today, July 13, 2005, Reuters reports that the Red China company CNNOC has tendered a purchase offer to buy the UNOCAL oil company.
Once again, I find myself asking WHY Red China is being allowed to purchase American companies, and WHY these deals are allowed to pass national-security scrutiny. I have written my Senators and Congressman about this, and I am still waiting for their response. I am NOT expecting to receive one, either.
Here is the Reuters news report:
CNOOC to improve Unocal bid; critics vocal
By Charlie Zhu and Deepa Babington
Reuters
Wednesday, July 13, 2005; 5:02 PM
SINGAPORE/NEW YORK July 13 (Reuters) - The board of China's CNOOC Ltd. met on Wednesday to fine-tune its $18.5 billion offer for Unocal Corp. as it races to win the U.S. oil producer's support for a takeover, a person close to the situation told Reuters.
CNOOC is expected improve its offer by setting aside roughly $2.5 billion in an escrow account that would be paid to Unocal shareholders if the deal fails to close, sources familiar with the situation said.
CNOOC plans to submit the new proposal before Unocal's board meets on Thursday, sources said. Unocal's board has so far backed U.S. rival Chevron Corp.'s $16 billion-plus offer made in April.
As CNOOC ramps up efforts to snatch Unocal, a congressional hearing into national security implications of the bid began in Washington with an outpouring of strong rhetoric against the Chinese company.
"I believe (China's) aim is inexorably to supplant the United States as the world's premier economic power and, if necessary, to defeat us militarily," Frank Gaffney, a Pentagon strategist under the late President Ronald Reagan, told the hearing.
A successful CNOOC bid would increase China's leverage over U.S. interests in Asia, warned Rep. Duncan Hunter, chairman of the House Armed Services Committee. Plus, Chinese companies did not behave as normal commercial entities on the international market, the California Republican said.
"Instead, they obey the political directions of China's Communist government," he said at the hearing.
Elsewhere in Washington, a top-level U.S. government committee charged with reviewing offers for American companies by foreign entities declined to begin a review of CNOOC's offer for Unocal, potentially delaying any deal between the two, The Wall Street Journal reported.
A CNOOC spokesman said the company was unaware of any such rejection. The Chinese company had earlier this month voluntarily asked for a review by the Committee on Foreign Investments in the United States, seeking to advance its bid.
A Treasury official on Wednesday said CFIUS reviews begin when both parties have filed appropriate paperwork and the panel decides an acquisition is likely. The committee does not do advisory opinions, the official said.
TACTICAL DISCUSSION
As Unocal's board heads into a meeting on Thursday, people familiar with the matter told Reuters the prospects of a timely closing on a deal with the Chinese company -- rather than the price now offered by CNOOC -- would be the focus of discussion by Unocal's board.
That's a sentiment echoed by Unocal shareholders, who are still nervous that a CNOOC bid could fall apart because of the political and regulatory hurdles it faces.
"I'd rather have assurances that the deal is going to go through," said one U.S. fund manager who owns Unocal stock.
Among changes being considered by CNOOC's board, according to sources familiar with the situation, is depositing funds in the United States so Unocal could make claims if CNOOC backed out of a deal. Few CNOOC assets are located in the United States, raising fears that Unocal could not seek claims against CNOOC's assets if the deal collapsed, sources said.
Unocal has asked for a $2.5 billion guarantee in an escrow account that would provide some protection for shareholders if the deal gets blocked by regulators or CNOOC walks away -- a provision CNOOC is expected to agree to -- sources said.
"They want to make sure they can pursue that claim in the courts in the United States," one source said. "CNOOC can make funds available in the U.S., but not a deposit on the purchase price," the source said.
The Chinese company also will make guarantees it can meet all U.S. national security-related requirements and sell all of its U.S. assets, sources said. It was unclear if it would make further changes to its offer.
"It is confident it'll satisfy and put in place all those terms that should give Unocal a high degree of confidence in relation to the closing conditions," the source said.
If Unocal backs CNOOC's improved offer, Chevron has three business days to respond under the terms of the original Chevron-Unocal agreement. Regardless of Unocal's board's recommendation, its shareholders still would have to vote in August on the existing Chevron offer.
CNOOC would "respond tactically" and immediately if the Unocal board rejects its bid or Chevron sweetens its offer, according to one source.
The companies have declined to comment.
Additional reporting by Wendy Lim in Hong Kong, Jessica Hall in Philadelphia and Jim Wolf in Washington, DC.
Red China
oil
globalism
financial crash
Today, July 13, 2005, Reuters reports that the Red China company CNNOC has tendered a purchase offer to buy the UNOCAL oil company.
Once again, I find myself asking WHY Red China is being allowed to purchase American companies, and WHY these deals are allowed to pass national-security scrutiny. I have written my Senators and Congressman about this, and I am still waiting for their response. I am NOT expecting to receive one, either.
Here is the Reuters news report:
CNOOC to improve Unocal bid; critics vocal
By Charlie Zhu and Deepa Babington
Reuters
Wednesday, July 13, 2005; 5:02 PM
SINGAPORE/NEW YORK July 13 (Reuters) - The board of China's CNOOC Ltd. met on Wednesday to fine-tune its $18.5 billion offer for Unocal Corp. as it races to win the U.S. oil producer's support for a takeover, a person close to the situation told Reuters.
CNOOC is expected improve its offer by setting aside roughly $2.5 billion in an escrow account that would be paid to Unocal shareholders if the deal fails to close, sources familiar with the situation said.
CNOOC plans to submit the new proposal before Unocal's board meets on Thursday, sources said. Unocal's board has so far backed U.S. rival Chevron Corp.'s $16 billion-plus offer made in April.
As CNOOC ramps up efforts to snatch Unocal, a congressional hearing into national security implications of the bid began in Washington with an outpouring of strong rhetoric against the Chinese company.
"I believe (China's) aim is inexorably to supplant the United States as the world's premier economic power and, if necessary, to defeat us militarily," Frank Gaffney, a Pentagon strategist under the late President Ronald Reagan, told the hearing.
A successful CNOOC bid would increase China's leverage over U.S. interests in Asia, warned Rep. Duncan Hunter, chairman of the House Armed Services Committee. Plus, Chinese companies did not behave as normal commercial entities on the international market, the California Republican said.
"Instead, they obey the political directions of China's Communist government," he said at the hearing.
Elsewhere in Washington, a top-level U.S. government committee charged with reviewing offers for American companies by foreign entities declined to begin a review of CNOOC's offer for Unocal, potentially delaying any deal between the two, The Wall Street Journal reported.
A CNOOC spokesman said the company was unaware of any such rejection. The Chinese company had earlier this month voluntarily asked for a review by the Committee on Foreign Investments in the United States, seeking to advance its bid.
A Treasury official on Wednesday said CFIUS reviews begin when both parties have filed appropriate paperwork and the panel decides an acquisition is likely. The committee does not do advisory opinions, the official said.
TACTICAL DISCUSSION
As Unocal's board heads into a meeting on Thursday, people familiar with the matter told Reuters the prospects of a timely closing on a deal with the Chinese company -- rather than the price now offered by CNOOC -- would be the focus of discussion by Unocal's board.
That's a sentiment echoed by Unocal shareholders, who are still nervous that a CNOOC bid could fall apart because of the political and regulatory hurdles it faces.
"I'd rather have assurances that the deal is going to go through," said one U.S. fund manager who owns Unocal stock.
Among changes being considered by CNOOC's board, according to sources familiar with the situation, is depositing funds in the United States so Unocal could make claims if CNOOC backed out of a deal. Few CNOOC assets are located in the United States, raising fears that Unocal could not seek claims against CNOOC's assets if the deal collapsed, sources said.
Unocal has asked for a $2.5 billion guarantee in an escrow account that would provide some protection for shareholders if the deal gets blocked by regulators or CNOOC walks away -- a provision CNOOC is expected to agree to -- sources said.
"They want to make sure they can pursue that claim in the courts in the United States," one source said. "CNOOC can make funds available in the U.S., but not a deposit on the purchase price," the source said.
The Chinese company also will make guarantees it can meet all U.S. national security-related requirements and sell all of its U.S. assets, sources said. It was unclear if it would make further changes to its offer.
"It is confident it'll satisfy and put in place all those terms that should give Unocal a high degree of confidence in relation to the closing conditions," the source said.
If Unocal backs CNOOC's improved offer, Chevron has three business days to respond under the terms of the original Chevron-Unocal agreement. Regardless of Unocal's board's recommendation, its shareholders still would have to vote in August on the existing Chevron offer.
CNOOC would "respond tactically" and immediately if the Unocal board rejects its bid or Chevron sweetens its offer, according to one source.
The companies have declined to comment.
Additional reporting by Wendy Lim in Hong Kong, Jessica Hall in Philadelphia and Jim Wolf in Washington, DC.
Red China
oil
globalism
financial crash
posted by Kentroversy at 7:41 PM
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