CNOOC withdraws Unocal bid

CNOOC has withdrawn its bid for Unocal, citing “unprecedented political opposition” as its reason for not upping its bid to challenge Chevron’s bid to take over the California-based oil company. The withdrawal of its bid on Tuesday came a day after Institutional Shareholder Services, a shareholder advisory firm, backed Chevron’s bid, saying that the CNOOC offer wasn’t large enough to compensate for the political uncertainties it carried with it.

ISS said that the six months minimum that it would take to close the CNOOC offer, should it have been accepted, would have reduced the value of its offer by 5 percent. This assessment did not take into consideration extra political interference in the acceptance process, which was likely to occur during the process of government approval of any deal.

A provision of the energy bill just passed by Congress contained a provision that would have delayed an acquisition of Unocal by CNOOC by at least 120 days. After the announcement of CNOOC’s withdrawal of its bid for Unocal, Unocal shares were down in the New York Stock Exchange, but CNOOC’s shares had gained almost 6 percent in late morning trading.