-- Shareholders of oil and gas company Unocal Corp. will vote Aug. 10 on a proposed merger with Chevron Corp. valued around $16.6 billion, even if Unocal's board subsequently accepts a rival bid from Chinese oil company CNOOC Ltd.
Unocal sent proxy materials to its shareholders of record as of Wednesday with a letter from chairman and chief executive Charles R. Williamson reiterating the board's unanimous recommendation to accept the Chevron bid.
The letter also noted the June 22 offer from CNOOC, valued at $18.5 billion, and said the board is in discussions with the company and would report to shareholders on the talks before the Aug. 10 meeting.
In a letter sent to Unocal employees Wednesday, Williamson said the company would "need to engage with CNOOC over the next few weeks concerning a number of issues in order to understand if it will be possible to reach a satisfactory agreement."
Williamson also said the company would continue to talk with Chevron about integrating the two companies even as it discusses a possible deal with CNOOC.
Chevron said in a news release that the Securities and Exchange Commission had cleared Chevron's registration statement for the Unocal transaction, the last regulatory hurdle for the deal.
"The successful completion of U.S. regulatory requirements demonstrates that our transaction can be brought to a quick and successful conclusion," David J. O'Reilly, Chevron's chairman and chief executive officer, said Wednesday.
Chevron's offer gives Unocal shareholders a choice between cash and stock or all cash.
Since CNOOC made its all-cash bid last week, Chevron has said its offer is superior because it has already cleared regulatory reviews. The CNOOC bid, by contrast, could take six months or more to be reviewed by U.S. and overseas agencies.
Chevron has also said it would bring its offer to a shareholder vote as required in the merger agreement even if Unocal should accept the higher CNOOC offer. The agreement also calls for Unocal to make a $500 million cash payment to Chevron if Unocal accepts another offer.
The latest proxy statement filed Wednesday also reveals that CNOOC first expressed its interest in acquiring Unocal last December, before Chevron approached. In previous filings, Unocal had referred to CNOOC only as "a non-U.S. industry participant."