The bidding war over Anadarko Petroleum is heating up with Warren Buffett’s Berkshire Hathaway offering to invest $10.0 billion in a new 8% preferred issue from Occidental Petroleum, along with warrants to purchase up to 80 million shares of OXY at $62.50, if the energy company successfully acquires Anadarko. Occidental is bidding against Chevron because both firms want Anadarko’s Permian Basin acreage, but the leverage Occidental would take on the fund the deal would be extremely onerous in our view.
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