Occidental Petroleum Corp (NYSE:OXY) has alerted its shareholders about an unsolicited mini-tender offer from TRC Capital Investment Corporation to purchase up to 2 million shares at a price below the current market value. The offer, which seeks to acquire a small percentage of Occidental's outstanding common stock, stands at $51.51 per share, a 4.45% discount to the closing price on October 14, 2024.
Occidental has recommended that shareholders not tender their shares, emphasizing that the offer price is lower than the recent trading price of Occidental's stock. The company has also pointed out that the offer is subject to numerous conditions and has advised shareholders to consult with their financial advisors and exercise caution.
The energy company, based in Houston, Texas, has no affiliation with TRC or its mini-tender offer and has advised shareholders who have not yet responded to the offer to take no action. Those who have already tendered their shares have the option to withdraw them by providing the necessary written notice as described in TRC's offering documents.
This mini-tender offer is part of a series of similar offers by TRC for shares of other companies, including previous offers for Occidental shares. Mini-tender offers are for less than 5% of a company's shares and are not subject to the same regulatory protections as larger tender offers.
The U.S. Securities and Exchange Commission (SEC) has previously issued guidance cautioning investors about mini-tender offers, particularly those made at below-market prices. Occidental urges shareholders to review the SEC's investor tips on mini-tender offers for more information.
The current offer is set to expire at 11:59 p.m., New York City time, on November 12, 2024, unless extended or terminated earlier by TRC. Occidental has made this information public through a recent SEC filing and has asked that brokers and dealers provide a copy of this report with all distributions related to the mini-tender offer.
In other recent news, Occidental Petroleum has shown strong financial performance with significant developments in earnings and revenue. The company successfully reduced its principal debt by $3 billion in Q3 2024, achieving nearly 85% of its $4.5 billion debt reduction target. This was facilitated by robust cash flow and strategic divestitures, including the public offering of common units in Western Midstream Partners (NYSE:WES).
Additionally, Occidental's acquisition of CrownRock marked a significant milestone, increasing its presence in the Permian Basin and shifting its focus towards further debt reduction. BofA Securities, Goldman Sachs (NYSE:GS), and Mizuho have all maintained a Neutral rating on Occidental Petroleum in light of these developments.
However, escalating tensions in the Middle East and the impending Hurricane Francine have prompted oil and gas producers, including Occidental, to halt operations in the Gulf of Mexico. It's also worth noting that analysts from Truist Securities have maintained a Hold rating for Occidental, citing the company's Q3 2024 performance which reflected average realized prices aligning with market expectations. These are the recent developments that investors should be aware of.
InvestingPro Insights
As Occidental Petroleum Corp (NYSE:OXY) advises shareholders against TRC Capital's mini-tender offer, it's worth noting some key financial insights from InvestingPro. Despite the current offer being below market value, OXY's stock is trading near its 52-week low, with a price-to-earnings ratio of 11.8. This could indicate potential value for long-term investors, especially considering that OXY has maintained dividend payments for 51 consecutive years, demonstrating financial stability.
InvestingPro Tips highlight that analysts predict the company will be profitable this year, which aligns with its current profitability over the last twelve months. The company's revenue for the last twelve months stands at $27.12 billion, with a robust gross profit margin of 60.83%.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips that could provide deeper insights into OXY's financial health and market position.
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