Bye Bye, Unocal?

[oboe]

Especially interested in Charon's take on this deal.   Who was it that said, "A Capitalist will sell you the rope to hang him with"? Maybe "strangle" is a more appropriate word in this case...

from NYTIMES.COM
Most takeover battles can be settled by price - the highest bidder wins. But judging by the sharp reaction yesterday in Washington, that may not be the case with Unocal.

Just a day after the China National Offshore Oil Corporation, or CNOOC, one of China's largest state-controlled oil companies, made an unsolicited bid of $18.5 billion for Unocal, senators and representatives, as well as lawyers, bankers and lobbyists, are taking jabs at what may become one of the thorniest strategic business challenges facing the administration.

At issue is whether CNOOC can buy Unocal, which in April agreed to a $16.4 billion merger deal with Chevron, the American energy giant.

The unexpected foreign bid for Unocal comes at a time when oil prices are hitting $60 a barrel, energy reserves are gaining more value, and the United States is concerned about its own oil and gas resources. At the same time, the administration needs to work with China on trade and currency issues, even as concerns are increasing about the growing economic power of China.

[TheDudeDVant]

Ya... I read about this yesterday myself.. Was kinda surprised by it..  Don't think it will ever happen, but what if??  

Need more input! lol

[rpm]

Been watching this UNOCAL deal pretty close. My Bro-In-Law has his retirement acct tied to UNOCAL stock. In the last year it has lost 1/2 of it's value.

He's ready to bail, but this may bump the price back up.

[myelo]

I think it would be a mistake for Bush to interfere with this. There’s no way this rises to the threshold of threatening national security. And the potential backlash effect on US firms investing in China would be devastating.

Let the Unocal shareholders decide if they want to accept Chevron’s sure money at a lower price or Cnooc’s higher price that may not come through.

[Charon]

Unocol's become quite the hot property. The conventional wisdom is that these companies are looking to buy it's reserves, and offering a price that reflects some confidence in higher base oil prices for some time to come. At least that applies to Chevron. CNOOC may have other issues at heart, related to demand projections perhaps. Haven't looked into this yet.

Where reserves are concerned it's truly a global industry. I heard ExxonMobil's speak out strongly in favor of allowing this to happen if it gets that far, since what's good for the goose is good for the gander.

IMO China will look to meet as much of its anticipated future demand as it can internally, minimizing any import opportunities as much as is practical. IMO all these joint ventures that have been underway with Shell and BP, etc. will have just served to transfer production and marketing know how to a significant future competitor with little in return.

Charon