Opinions of Anadarko’s Financial Advisors
Opinion of Evercore Group L.L.C.
At a meeting of the Anadarko Board held on May 9, 2019, Evercore rendered to the Anadarko Board its oral opinion, subsequently confirmed in writing, that as of May 9, 2019 and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s written opinion, the merger consideration was fair, from a financial point of view, to the holders of Anadarko common stock entitled to receive such merger consideration.
The full text of the written opinion of Evercore, dated as of May 9, 2019, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex B to this proxy statement/prospectus and is incorporated by reference in its entirety into this proxy statement/prospectus. You are urged to read this opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the Anadarko Board in connection with their evaluation of the merger. The opinion does not constitute a recommendation to the Anadarko Board or to any other person in respect of the merger, including as to how any holder of shares of Anadarko common stock should vote or act in respect of the merger. Evercore’s opinion does not address the relative merits of the merger as compared to other business or financial strategies that might be available to Anadarko, nor does it address the underlying business decision of Anadarko to engage in the merger.
In connection with rendering its opinion Evercore had, among other things:
| • | reviewed certain publicly available business and financial information relating to Anadarko and Occidental that Evercore deemed to be relevant, including publicly available research analysts’ estimates; |
| • | reviewed certain non-public historical financial statements and other non-public historical financial and operating data relating to Anadarko and Occidental prepared and furnished to Evercore by the management of Anadarko and Occidental, respectively; |
| • | reviewed certain non-public projected financial and operating data relating to Anadarko under alternative commodities pricing assumptions prepared and furnished to Evercore by the management of Anadarko, reflecting management production and commodities pricing estimates (“Management Strip Forecasts”) and management production estimates and analyst consensus pricing estimates (“Management Consensus Forecasts”) and which are summarized in the section entitled “The Merger—Certain Unaudited Prospective Information” of this proxy statement/prospectus; |
| • | reviewed certain non-public projected financial and operating data relating to Occidental prepared and furnished to Evercore by the management of Occidental, as adjusted by the management of Anadarko and approved for Evercore’s use by Anadarko, and which are summarized in the section entitled “The Merger—Certain Unaudited Prospective Information” of this proxy statement/prospectus; |
| • | discussed the past and current operations, financial projections and current financial condition of each of Anadarko and Occidental with the management of Anadarko and Occidental (including their views on the risks and uncertainties of achieving such projections); |
| • | reviewed the reported prices and the historical trading activity of each of Anadarko common stock and Occidental common stock; |
| • | compared the financial performance of each of Anadarko and Occidental and their respective stock market trading multiples with those of certain other publicly traded companies that Evercore deemed relevant; |
| • | compared the financial performance of Anadarko and the valuation multiples relating to the merger with those of certain other transactions that Evercore deemed relevant; |
| • | reviewed the merger agreement; and |
| • | performed such other analyses and examinations and considered such other factors that Evercore deemed appropriate. |
For purposes of its analysis and opinion, Evercore assumed and relied upon, without undertaking any independent verification of, the accuracy and completeness of all of the information publicly available, and all of the information supplied or otherwise made available to, discussed with, or reviewed by Evercore, and Evercore assumed no liability therefor. With respect to the projected financial data relating to Anadarko referred to above, Evercore assumed that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgment of the management of Anadarko, as to the future financial performance of Anadarko, under the alternative commodities pricing assumptions reflected therein. Evercore expressed no view as to any projected financial data relating to Anadarko, or the assumptions on which they were based.
For purposes of rendering its opinion, Evercore assumed, in all respects material to its analysis, that the representations and warranties of each party contained in the merger agreement were true and correct, that each party would perform all of the covenants and agreements required to be performed by it under the merger agreement and that all conditions to the consummation of the merger would be satisfied without material waiver or modification thereof. Evercore further assumed that all governmental, regulatory or other consents, approvals or releases necessary for the consummation of the merger would be obtained without any material delay, limitation, restriction or condition that would have an adverse effect on Anadarko or the consummation of the merger or materially reduce the benefits of the merger to the holders of Anadarko common stock.
Evercore did not make or assume any responsibility for making any independent valuation or appraisal of the assets or liabilities of Anadarko or Occidental, nor was Evercore furnished with any such appraisals, nor did Evercore evaluate the solvency or fair value of Anadarko or Occidental under any state or federal laws relating to bankruptcy, insolvency or similar matters. Evercore’s opinion is necessarily based upon information made available to Evercore as of May 9, 2019, and financial, economic, market and other conditions as they existed and as could be evaluated as of that date. Subsequent developments may affect Evercore’s opinion and Evercore does not have any obligation to update, revise or reaffirm its opinion.
Evercore was not asked to pass upon, and expressed no opinion with respect to, any matter other than the fairness, from a financial point of view, of the merger consideration to the holders of Anadarko common stock entitled to receive such merger consideration. Evercore did not express any view on, and its opinion did not address, the fairness of the merger to, or any consideration received in connection therewith by, the holders of any other securities, creditors or other constituencies of Anadarko, nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of Anadarko, or any class of such persons, whether relative to the merger consideration or otherwise. Evercore assumed that any modification to the structure of the merger would not vary in any respect material to its analysis. Evercore’s opinion does not address the relative merits of the merger as compared to other business or financial strategies that might be available to Anadarko, nor does Evercore’s opinion address the underlying business decision of Anadarko to engage in the merger. In arriving at its opinion, Evercore was not authorized to solicit, and did not solicit, interest from any third party with respect to the acquisition of any or all of Anadarko’s common stock or any business combination or other extraordinary transaction involving Anadarko. Evercore’s opinion does not constitute a recommendation to the Anadarko Board or to any other person in respect of the merger, including as to how any holder of shares of Anadarko common stock should vote or act in respect of the merger. Evercore expressed no opinion as to the price at which shares of Anadarko common stock or Occidental common stock will trade at any time. Evercore is not a legal, regulatory, accounting or tax expert and has assumed the accuracy and completeness of assessments by Anadarko and its advisors with respect to legal, regulatory, accounting and tax matters.
Set forth below is a summary of the material financial analyses reviewed by Evercore with the Anadarko Board on May 9, 2019, in connection with rendering its opinion. The following summary, however, does not purport to be a complete description of the analyses performed by Evercore. The order of the analyses described and the results of these analyses do not represent relative importance or weight given to these analyses by Evercore. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data that existed on or before May 9, 2019, and is not necessarily indicative of current market conditions.
The following summary of Evercore’s financial analyses includes information presented in tabular format. In order to fully understand the analyses, the tables must be read together with the full text of each summary. The tables are not intended to stand-alone and alone do not constitute a complete description of Evercore’s financial analyses. Considering the tables below without considering the full narrative description of Evercore’s financial analyses, including the methodologies and assumptions underlying such analyses, could create a misleading or incomplete view of such analyses.
