occidental is a good little company.n a company in anadarko that has operations they are not familiar toh and it is not easy double the size of your company. they will have to get synergy out of this to make $76 work. one of the issues now as we have seen in the free market is the market does not like occidental doing this. the value of that offer is pretty significantly below what the face is because the equity of occidental is down so much. they are good operators. there is no question about that. we think there is a lot of risk in what they are trying to pull off and not nearly as much risk for a company like chevron. will --ou have said he it would double the size of the companies. this is before any proposed merger. we can see that occidental is much more leveraged than chevron. they already have a fair amount of debt. as an owner of occidental are you concerned about their leverage flat out? mark: we will be after the deal, certainly. not before the deal. occidental does throw up a lot of free cash. we believe the

combining occidental with anadarko, occidental will have to take on this massive lng project in mozambiquefor example. it doesn't have anything like that at the moment. they say they don't have any problem with that, they have project experience, but this would be a new industry for the company. if they sell it, who would buy it? there is a lot of uncertainty in the market even though it is fast-growing. lots of questions raised, absolutely. the size plays a big part of it. amanda: great to have your thoughts, simon casey. moving past some negative headlines. the market expecting facebook earnings will improve the social media company has moved past controversies. this is bloomberg. ♪ isnda: president trump speaking now in atlanta, expected to speak on opioid addiction. we will monitor for any news headlines that he makes. a reminder, if you want to watch that live, you can do that on the bloomberg at live go. we are waiting for facebook's first-quarter numbers. one of the questions is whether they will reinforce a rebound even analyst looking to see the company moving past negative headli

occidental says the same thing we don't have a strong opinion on that. probably both very good there but the point is people went in to the permian and if you did, anadarko is a great property and occidental is a great property with companies like exxon and royal. >> i can't imagine there's not other big players that would like to see some of the assets at work in the permian right now. so my whacky question is, let's say chevron doesn't get this company and occi does. could you see a day where chevron would buy it to take over the two of them at once >> that >> they'd be big enough too. >> the great thing, it's a 10%, they're buying something for 10% their size in terms of buying something 50% your size, 70% your size, that really is betting the company. and as we know, oil prices are very, very volatile. so we wouldn't be that inclined for anybody to make that big of an acquisition now, whoever doesn't get the anadarko, devin has been rep repositioning the portfolio and a few others to make sense for some of the larger players >> all right david, thank

good to see you on the occidental pick.an buy cimarex >> all together. >> all together now. >> jim we'll see you at 6:00, "mad money" 6:00 p.m. eastern time a lot more on the bidding war. s&p is down 2 1/2. you should be mad at airports. excuse me, where is gate 87? you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad. get e*trade and start trading today. why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. we're the tenney's and we're usaa members for life. call usaa to start saving on insurance today. ♪ >>> good wednesday morning welcome

lisa: and occidental has a much bigger debt-to-equity ratio. depends how much the stock is worth. lisa: it could potentially be costly. david: which benefits chevron. lisa: perhaps that is why chevron is up higher. definitely one to watch as it speaks to oil prices and potential merger and acquisition activity. david: that does it today. stay with us for live coverage of the global conference with guests including stephen schwartz and david solomon of goldman sachs. the open with jonathan ferro, allianz global investment strategist. from new york, this is bloomberg. ♪ jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪ jonathan: coming up, the nasdaq at a record high as big tech delivers big results. alphabet coming up next. cap it inflation keeping fed rate cut hopes alive and well despite better-than-expected gdp growth and u.s. officials during a for trade talks in beijing with key issues still unresolved. 30 minutes until the start of trading. futures going nowhere. mu

occidental increases their bid for anadarko, entering a battle with chevron. investors place their bets. tesla and panasonic. elon musk is in a twitter battle with the battery supplier, saying they are responsible for the constrained reduction of the model three. ♪ alix: i'm alix steel. welcome to bloomberg "commodities edge," 30 minutes focused on the companies, physical assets, and the trading behind the hottest commodities with the smartest voices in the business. first, we kick it off with our take on the bricks story. joining me is derek brewer, director of energy group. our spotlight is on oil. prices hitting a six-month high as president trump says he will issue no waivers to countries buying iranian crude. many analysts say it provides upside risk to the market. >> as high as 100 or as low as zero. >> i doubt $100 looks likely here. >> about 70. >> for us the base case is 82 on brent. >> there is a natural cap, even if you may see a knee-jerk reaction or spike. it is unlikely to last too long. >> and there is a risk prices keep rising. >> we saw a quic

occidental made a third. eight billion dollar bill last week interrupting advanced merger talks between anadarko and rival chevron now occidental has a big name with deep pockets on their side should they decide to top chevrons thirty three billion dollars bid by a greater margin occidental is successful and willing anadarko berkshire will invest the ten billion dollars into one hundred thousand new preferred shares of oxy stock the annual dividend would be eight percent the wall street journal reports that a successful bid by occidental would grant berkshire the opportunity to buy up to eighty million occidental at sixty two dollars and fifty cents a share today occidental stock fell before rise rallying above fifty nine dollars by early afternoon and a dark zero has been trending higher over the past week and was pushing towards seventy three dollars in afternoon trading. the oil markets are clearly having a huge focus right now and we anticipate a higher consumption in the house summer driving months u.s.

occidental have come out and gone public but they've not engaged.he letter in the public domain and now the ball is in anadarko's corner and chevron's corner, whether they come through with a higher offer. is all about who has the balance sheet strength to make this work. presumably chevron has the bigger balance sheet. will that be decisive? simon: most likely. we will see. if you look at the reaction that has come through this morning from the initial analysts and comments that followed the news, there is questioning about how much further chevron would want to take this. they have the firepower and the capacity to do this. they can probably top occidental's offer and still make a decent return. what is being notable is a lot weanalysts are saying question the benefits of any bidding war breaking out. we have a deal that has been agreed, maybe let's stick with this one. vonnie: wise anadarko doing this? it obviously needs something and is getting a boost in terms of share prices on the idea that it is looking. if it is not going to win and it is t

>> thanks, becky we are joined by vicki hollub, president and ceo of occidental.e news with you, the decision by the company to submit what it calls a superior proposal to acquire anadarko nice to have you thank you. >> thank you i'm so happy to be here. >> well, it's going to be a busy day for you. why are you doing this >> because we're so excited about this acquisition anadarko has great assets, and those assets will enhance our dividend-plus-growth strategy. we are the right acquirer for anadarko petroleum because we can get the most out of the shale. we have a lot more experience there. we are performing really, really well and what hasn't been talked about very much is that the up side in this deal is the shale play, is the shale development 75% of the value of anadarko is in the shale and we're the best company to develop the shale. we have a proven track record in the permian. we're right now the best operator in the permian, and -- >> i noted some of those statistics that you shared in terms of 4% of the wells drilled but 23 of the top 100 top performing

we've known occidental was involved in this possibly for a couple of weeks now.s becoming public, stepping up in a bigger way. >> it's unusual to be a superior offer, from a fiduciary point of view to maximize shareholder value, if one bidder says we pay you $76, the other is $65. you have to make a pretty strong case that the lower offer is worth the higher potential stock upside i would assume so the numbers here are kind of interesting on the one hand and the other hand, jordan, i'm curious, is anadarko such an extraordinary asset as we just heard the ceo of occidental describe and if so, why haven't they traded higher than they are now? >> well, if you're a believer in the permian, you'd say it's worth it but there's anna edwar edwards. there's been an argument that it's hard to fund independently. a huge multibillion dollar project that it's questionably weights down the stock and in general, a lot of questions about emps being down valued on the stock market of late >> right you think it's going to be tough for occidental with the higher price offer here to

vicki hollub, ceo of occidental. ed, always a pleasure. ed: that was great.earned a lot about commodities. alix: david, back to you. david: great job to alix steel and david -- and ed hammond. now let's get a check on the markets with emma chandra. emma: after the closing highs of yesterday we are looking at stocks drifting in the u.s.. red across the screen for the major indexes. the s&p 500 and the nasdaq trading below the closing record highs we saw yesterday. it seems that investors are trying to weigh whether the rally we have seen this year has links to take it any further. earnings still a driver for individual stocks. we have been seeing earnings surprising to the upside rather than the downside. take a look at the chart. we are seeing the average share increased for the s&p 500 companies after earnings is falling. it is now a 3.2% at its year on year basis. share price increase saw the s&p 500 companies that have reported so far. let's take a look at some of those companies that have reported earnings. we are seeing a bunch of them fall. take a look

nobody believes if chevron comes in with a bid, it's going to top occidentals. nobody believes that, that i've talked to. they believe if chevron does sweeten the bid, it won't be above 76 a share it will be less than that because they viewed their equity, their stock as that much better than occidental >> guys, thanks. brian sullivan, josh silver sateen, thank you so much. >> go to aditi >> reporter: the fda announced it's authorized marketing of heated tobacco products like phillip morris products by altria, basically means it will allow altria to sell in the u.s. this is a huge moment for altria which is increasingly been investing and placing bets on the alternative tobacco products it's one, juul is another. altria is 35%, has a 35% stake in juul. overseas, iquil in the market by phillip morris international called the great unsmoke shares are up now. altria 2%. back to you guys. >> thank you very much adi aditi. >>> to a developing story. violence in venezuela as opposition forces clash with those loyal to nicholas maduro a eamon javers at the white house.

if we do see occidental or anadarko side with occidental saying it is superior coming chevron decideill see if shareholders approved. guy: rachel, great stuff. thank you very much indeed. let's continue the conversation in a moment. from london and new york, this is bloomberg. ♪ the latest innovation from xfinity isn't just a store. it's a save more with a new kind of wireless network store. it's a look what your wifi can do now store. a get your questions answered by awesome experts store. it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome. guy: 30 minutes left in the european trading day. from london, i'm guy johnson during vonnie: from new york, i'm vonnie quinn and this is the european close on bloomberg markets. guy: it is last trading day of the month so we are keeping a careful eye on positioning. also have to keep careful eye on the macro story. banks continue to be a focus. watching a lot of banks come out with numbers. nordic banks suffering. bank down -- dots -- danske down sharpl

occidental says we hope anadarko would proceed quickly. >> that's from occidental when we asked themor a statement. >> chevron says the following as well we believe our sign of agreement with anadarko providing the best value and most certainty anadarko shareholders. >> we'll see what happens here jim, no shortage of shareholders speaking out i think that may have turned anadar anadarko's view to we got to engage they sent their 3% holder basically saying the other day on friday that it would be laughable to conclude that the occidental law is worth 75 and the current stock price is not -- it was worth only 61. we believe it would be ludicrous to stop the product now. it would be interesting decision for chevron. >> i spoke with some chevron people this weekend. if you listen to the comps call. we can't wait. they're talking a lot more about africa and they know how to handle that. chevron's stock is up as if everything they said three days ago means nothing. i don't get it how can we be so confident that they are done when at 9:00 on friday, they're telling you, let me tell you how

so they are buying land physically close occidental i'm sure would be right there as well. there also an l&g perspective. that is a massive play >> and what do you think about the macro setting here coming into this, we were all talking about how much oil was up although on a 12 month basis, a little bit more even we've talked about how investors were far more optimistic >> and i think it is an interesting story because what we're seeing is the majors go more into the permian. since 2014, investment is going into the short cycle projects. we're really seeing them step up their exposure to the permian. not in the long lead time projects not in the deep water projects so the two questions, first of all, deflate the cost even further. so it will drive down costs to such a level can opec even compete with that. is that an existential challenge for opec you can essentially ever really put the companies -- >> that is why i'm surprised that the oil price is up on which on the opec supply cuts. between that and venezuela, it is enough to tighten the market to this septembextent >>

abutting bidding war and the energy sector leads our global report today as occidental petroleum makes an offer for anadarko who had already been wooed by chevron anadarko petroleum was already in fairly advanced talks with chevron for a sale at thirty three billion dollars occidental has now up that price to roughly thirty eight billion dollars at seventy six dollars per share eleven dollars above chevron's bid the broken engagement between anadarko and chevron would include a one billion dollar fee interestingly a spokesperson for occidental expressed frustration that anadarko had not informed occidental of that provision the prize in the fight is a company with extensive global holdings including key asses in the much discussed her museum basin in west texas a primary site of the oil shale boom shares of anadarko were up more than twelve percent on the news while the stocks of the two other corporate suitors fell. as we reported yesterday to trumpet ministrations decision to end all exemptions to their defacto blockade of the rainy and oil sector seemed to move markets with prices r

expressed frustration that anadarko had not informed occidental of that provision. the prize in the fight is a company with extensive global holdings including key asses in the much discussed hermes and basin in west texas a primary site of the or oil shale boom shares of anadarko were up more than twelve percent on the news while the stocks of the two other corporate suitors fell. as we reported yesterday to trumpet ministrations decision to end all exemptions to their defacto blockade of the rainy and oil sector seemed to move markets with prices rising to recent highs the policy change affected five countries including major consumers china india and turkey which had been previously granted waivers happened ahrons oil exports go to china or did before the end of the extensions to the u.s. sanctions a spokesperson for the chinese foreign ministry denounced the move as an example of a quote unilateral sanctions and long arm dura stiction the turkish foreign minister was similarly indignant over the trump state department's policy change now a senior iranian militar

abutting bidding war in the energy sector leads our global report today as occidental petroleum makes an offer for anadarko who had already been wooed by chevron anadarko petroleum was already in fairly advanced talks with chevron for a sale at thirty three billion dollars occidental has now up that price to roughly thirty eight billion dollars at seventy six dollars per share eleven dollars above chevron's bid the broken engagement between anadarko and chevron would include a one billion dollar fee interestingly a spokesperson for occidental expressed frustration that anadarko had not informed occidental of that provision the prize in the fight is a company with extensive global holdings including key asses in the much discussed her museum basin in west texas a primary site of the oil shale boom shares of anadarko were up more than twelve percent on the news while the stocks of the two other corporate suitors fell. as we reported yesterday the trump administration's decision to end all exemptions to their defacto blockade of the reigning and oil sector seemed to move markets with pri

. >>> shares down 2% for occidental petrol.y to bid in the mid 70s to acquire anadarko petroleum until chevron came in and announced friday morning they've struck a deal. what's it mean for the occidental petroleum and deal making in the sector roger reed, securities welcome. >> thanks, kelly good to be here. >> why do you think this chevron was so interested in anadarko's assets >> coming straight off the value, obviously matters synergy is a huge part of that what you pay for the company and then the other thing is the nice overlap they have. good overlap and also in the gulf of mexico some other project in their port foal wroe. >> anadarko shares trading around $62 occidental reportedly willing to offer the mid 70s, roger why should anadarko shareholders not consider that a superior offer and what would that have done for occidental? >> well, first, let me just say, you know, no confirmation from occi any sort of bid was made. number one, a little careful on that front but if you were to look at the opportunity for a company

we have a chatter about occidental . occidental bid on anadarko as well, showing their desire to get bigger in the permian. what made anadarko attracted to them, chevron owned a part of the mineral rights that anadarko operates in, and is continuing acreage. with exxon and chevron becoming so large in the permian, it forces the issue for smaller producers to go out and get together, so they can get more pricing power for their services, supplies they will need to develop their acreage. vonnie: thank you both. fernando valley of bloomberg intelligence, and from janice henderson, we also had our guest noah barrett. wells fargo tumbles as jpmorgan jumps. both banks announcing quarterly results this morning. we get a look at the start of the bank earnings. this is bloomberg. ♪ vonnie: this is "bloomberg markets." i'm vonnie quinn in new york. amanda: i'm amanda lang in toronto. jpmorgan and wells fargo were out with earning this morning. jpmorgan jumped on the news, wells fargo going in the other direction. you can see jpmor

today in a cnbc interview the ceo of occidental made here. are the right acquirer for anadarko petroleum because we can get the most out of the shale. we have a lot moreerxperience and we are performing really, really well and what hasnke been tabout very much is that the upside in this is the shale play and the shale pment. 75% of the value of anadarko is in the shale, and we're the best company to develop the shale. >> s anadarkod it would review this new offer. in the meantime, analysts wer chevron ng today that will sweeten its bid. anadarko rose sharply while occidental and chevron fell. >>> the ceo of biotech company idea on how to fix the nation aging infrastructure. in an op ed piece in today's "new york times," the doctor proposed for the next threeme years everycan public company should issue 1 tof its equi a newly formed infrastructure bank that would be used tost fund cction projects. he said his idea would ise $1 trillion and he explained his reasoning during an interv >> if you walk around our lab, we have some of the most p inn

occidental, down 3%. knee-jerk reaction i think they're assessing it saying, look, this is much more likely that occidental's bit is going to go through. anadarko down 1.1% probably less likely you'll see a bidding war. >> becky, it also raises the question about buffett's investments and berkshire's investments in the oil and gas space. bring us up to speed how is he positioned and how much does this increase this exposure >> additional exposure, but he's never shied away from energies or even oil. right now berkshire hathaway has phillips 66, also a new stake in suncor berkshire hathaway is one of the big four they've got power plants, natural gas pipelines, wind energy, all kinds of things. this fits in nicely and is one of the areas where he kneels comfortable. he feels comfortable in industrials, railroads, but also places like financials again, this is pretty classic berkshire move, pretty classic warren buffettt move. >> i'll lean on your intuition and what you know about berkshire over all these y

it seems anadarko just has to go to occidental.ch bigger that even if you throw in issues about they are financially sound -- even with it there's so much more cash. anna: what multiple higher is it? stuart: it depends. you have cash and shares over here and over here. the question is what are you getting at the end of it. what does the balance sheet look like, and is it strong enough to fund these ambitious projects order the assets get sold off in which case, what is the point? matt: last week brent crude went up to $75 a barrel and now it is below $72. when i am asking why it is because donald trump tweeted on oil. from -- for how often he mentions oil on his twitter feed. it is over 30 times since he has become president. why would the market all of a sudden react to donald trump tweeting on oil when it does not typically do so? stuart: two main reasons. one is there is only one country which accounts in opec, saudi arabia. donald trump he called opec but he did not, he called saudi arabia. saudi arabia has a lot at stake and i

alone is the ceo of occidental?nsaction now, you have seen shareholder nervousness around it. the bigger the numbers, there's always this risk of are you overpaying for an asset because there is competition? inhave seen regulators come more strongly on some of these. in europe, some of the largest deals got scuppered because they couldn't get regulatory approval. even if it goes through, convincing shareholders and ensuring they stay happy will be hard. just look at bayer's ceo. tom: she is talking about the event diagram of the gulf of mexico. knows the permian basin cold. her shareholders do not care. the reporting that occidental is overpaying? ruth: we have not said that yet, but it is significantly overvaluing the last closest offer. we have seen that in some of these big-ticket mergers, where the ceo is going with a lot of enthusiasm, five years down the line, their market cap is half of when they began this. you would imagine that investors are being rightly cautious. francine: how does this translate into yo

it's telling a story we see anna darko down, occidental down. and this reduces the likelihood chevron comes in with a rebid for anadarko yet, look at the price of chevron, going up. maybe the market is say, eh, this might make chevron walk away if you need that silver arrow, this is a steep price to pay i mean, not my opinion you talk too anybody, if you will give out 100,000 preferred shares with an 8% dividend, with a lock-in period of ten years, 8% coupon for buffet buffet you know he's a nice guy, comes on with becky, smiles. he drives a hard bargain, guys, 8%, 100,000 shares for ten years. it's a steep price to pay. it may be what gets occidental over that finish line with anadarko. >> it would seem like it >> it certainly would. why don't i ask somebody that knows more about it than i do, our next guest 250d, cash flow was up, the price moving up. quickly, would you pay an 8% coupon to warren buffet? >> i would study the credentials, but anadarko is a great set of assets, chevron is a good company, occidental is a good company, there are s

look at that big, sharp drop we can see that's a dramatic drop to the downside in occidental folks areing to see through the tea leaves right now that maybe if chevron comes back, maybe does occidental get a push to the-up side these october 65 calls, i bought these because they had two different hits today this was the bigger. 10,000 of these were bought at the time that i had seen this trade. i loved what i saw, i liked the risk reward. is it going to happen? it seems like a lot of people are betting on this possibility happening. we'll see. but jon's got a few more on occidental as well >> take a look at this one if you can pull up that chart again, vince when this one's just in the last couple days, scott, they were aggressively buying the 55 double nickel puts in this one, in occi and then they sold the upside calls to pay for it they already made a pile of money on that drop well, that was at the same time that they were buying aggressively, 10,000 last thursday, pete, 10,000 anadarko calls. they bought them very smartly because they were buying the 65 strike, all the way up to t

while occidental scooped up apache, and we get perfect quarters from citigroup and goldman sachs. highly unlikely. this isn't a what have you done for me lately market it's a what have you done for me this morning market. with that in mind, what's the game plan for next week? let's start with citigroup and goldman sachs. citi will have a hard type topping jpmorgan it could be more like wells fargo, which was a tab subdued only closed down about $1.25 i doubt sit tee will be as bad, but the stock is running up too much at this point don't get too excited. people want revenue growth, not endless buy backs. goldman stricker, the ceo made his mark, and i like his mark, but it will be out for these guys with the huge corruption case in malaysia as far as i'm concerned, this turned on whether goldman's compliance team knows what they're doing. i think they're the best in the business, but you can't always stop every potential crook who works for you. if the stock pulls back, i would be a buyer >>> next up, the worst active stock in the entire universe, united health. unh. we had them on

if you take a look at shares at least right now, occidental is up just slightly here. remember, we are very early. it's only about 5:00 the story is developing and the shares will likely begins it stay ahead as "worldwide exchange" continues. >>> the clock is ticking on a u.s. trade deal with china we'll take you there live ahead. >>> then we'll take you live to madrid following this weekend's national elections why the outcome could impact every international investor. >>> and later federal reserve hopeful steven moore is calling this out >>> welcome back to "worldwide exchange." i'm courtney ragan let's get you up to speed on what's happeningin the markets for the futures, just slightly higher if markets were to open here in the united states, the dow jones would be 26 points higher. the s&p 500 would add two and the nasdaq up by 9 points at this moment. let's take a look and see what's going on in europe moments ago we were mixed. that's still the case with a little bit more down side bias as we've seen several moments ago. it looks as if italy is the only positive

chevron is four times the size of occidental. it's got a bigger balance sheet.he ability to sweeten its bid. for the record, i don't think either company needs to make this acquisition, and in fact i wish that neither of them did it but one of them i'm pretty sure is going to end up with anadarko and if i were a betting man i would say put the money on chevron at this point. >> josh, you think ox deccident have a decent shot at this >> both companies have a chance but the real advantage for occidental is they bid $11 per share higher and it comes with a 50-50 bid for cash and stock so that's the real key for them and i think that's part of the reason why anadarko is engaging with them right now is they see that value of their enterprise really coming out in the $76 offer. >> are there any possible third bidders, pavel >> not likely. but stranger things have happened realistically, the only other super majors that would be big enough to test their luck on something like this would be exxon or shell in other words, trying to outbid chevron and succeeding, it's rea

. ♪ >> occidental petroleum has made anadarko.d for which has just now confirmed the , receipt of thel carefully review the proposal. >> going back two weeks, they made the announcement that they had reached an agreement by anadarko. we confirmed reports that occidental did also express an interest at a higher per share offer that has been rebuffed. if occidental had come out in been public, and it is in honors -- is in anadarko's court. >> we feel very strongly as a we have looked at -- very strongly as we have looked at anadarko that they have incredible assets, and combining their assets with our assets further enhances our dividends and production growth. ♪ >> president donald trump has said he will not nominate herman cain for a seat on the federal reserve board. in a tweet the president said this. "my friend herman cain will not truly wonderful man, has asked me not to nominate him for the receipt of the federal reserve board. i will respect his wishes. herman is a great who truly loves our country." cain has said he didn't want to go through the arduous vetting process. when he

he stepped into to help occidental, a great company.ssets are really whether it is for occidental or chevron. it doesn't surprise me. jason: great to catch up. biggest thing you learn from hanging out here at milken? bob: this is a very different conference from the other ones. we have investors from all over the west coast, pacific rim. to only a chance to talk existing partners, shareholders, but possibly new shareholders. it has a broad remit of subjects here. i have enjoyed it. jason: great to spend some time with you, bob dudley, thank you. amanda: thank you for the interview, jason. much more from milken today, including an extensive interview with ken griffin, founder and ceo of sydow. up next, ontario is looking to drum of u.s. investor interest in the province. we get an update on what they are doing. my conversation with the ontario finance minister vic fedeli after this. this is bloomberg. ♪ amanda: officials from the government of ontario argue new york promoting their message at the provinces business. i spoke to the financ

chevron and occidental fell. joining us now is rob fumel, portfolio manager at tortoise capital advisers. welcome, rob. nice to have you here. >> thank you, sue. >> do you like this deal? >> yeah. we think it's a great deal for both parties and i thugh transformati will build a cash flow over th nextew years and the buildin scale, reducing operations and operational expenses are key to help bring investck to the energy sector there's a lot of gre going on in the u.s. sector and investors haven't rewarded that yet. >> not yet. you own both of those stocks, correct? >> that is right, sue. we own more anadarko than we do chevron, but we do own chevron as well. >> the deal making in the oil and energy sector hit a ten-year low in the first quarter because of the steep drop in oil prices. do you think we're going see more deals now that oil has really reversed that t? >> you know, i think what you have to look at is t is right for consolidation and the reason i say that is becau exxon and chevron want to ge like the p

this occidental offer came under the table last week. it is a higher offer.re is a stock component here. but as you said, there's this $1 so the ballk fee, is in its court whether it -- whether chevron wants to raise the bid or decides to cut its losses and walk away at this point. guy: chevron is higher today. how should i read that? always said have that costs matter, so the ball is in their court and the get to decide what happens next. what a lot of analysts are saying is they don't necessarily have to meet this bid and go over it. they've got stock on the table. they also don't have to put this to a shareholder vote. even if they don't have the money put into the bid, they might still come out of this successfully. vonnie: chevron has four days to decide. meantime, de shaw has been trying to encourage an open sales process, according to those who spoke to bloomberg. what does that mean? lizzie: the major shareholders just want to get the most value out of this. de shaw has been pushing, as reported last week, for this open sale process. what is not clear

if occidental had come out and been public, and it is in anadarko's court.o in chevron's court. >> we feel very strongly as we've looked at anadarko over the past couple of years that they have incredible assets. and combining their assets with our assets further enhances our strategy of dividends plus production growth. vonnie: president donald trump has said he will not nominate former pizza company executive herman cain for a seat on the federal reserve board. in a tweet the president said this. "my friend herman cain will not be nominated for a seat of the federal reserve board. i will respect his wishes. hermann is a great who truly loves our country." cain has said he didn't want to go through the arduous vetting process. would he have made it? michael: it doesn't look like he would have, and that is why he was able to get through it. four republican senators had said they would vote against marginey had a 53-47 puts him below 50%, he wouldn't have been confirmed by the senate. that was a message the republican senators were deliberately sending to don

could buffett's arrow help seal the deal for occidental? us to discuss is tim razan from oppenheimer thanks for joining us. is extra funding crucial to who's going to win out >> we believe it is. it's a really interesting lever to gives a lot of flexibility to oxy because right now they can use that money in lieu of the 19 billion of debt they need to raise or there's the option that that could add to the cash component of the offer and lower the shares issued. and if they can lower shares issued below roughly 150 million they won't need to seek a shareholder vote >> is that part of this as well? why are they doing this if their shareholders are potentially going to be against it >> it's possible they're doing this because the anadarko board may want that security because shareholder vote risk is out there right now. and i think if nothing else the stamp of approval from warren buffett plus $10 billion gives you a lot more flexibility >> does it make it less risky for shareholders from occidental who were worried about the stretch on the ba

a budding bidding war in the energy sector leads our global report today as occidental petroleum makes an offer of four and a darko who had already been wooed by chevron and a darko petroleum was already in fairly advanced talks with chevron for a sale at thirty three billion dollars occidental has now up that price to roughly thirty eight billion dollars at seventy six dollars per share a love in dollars above chevron's bid the broken engagement between anadarko and chevron would include a one billion dollars fee.

it's a permeon thing and i would love to play matchmaker, but it's fun and if occidental is out there, as well then there's this animal spirit trying to look to do deals and that happens. that would be my pick. >> this is unprecedented because we asked all these guy, the two players and everyone said exxon and somebody else. so grasso. >> i'm going to say exxon as well and there are two other companies just to state it for the people looking at the spot. >> total. >> if you're going to go into buying a company as david faber reported it could have been an anadarko-occe. it doesn't have to be a major. >> it doesn't have to be there could be a lot of mid-tier capitalization companies >> with that said, exxon and -- >> for me it's cxo i do believe you want to have a permeon presence and the good acreage. the way they match up. exxon and they haconcho, they ae together. >> to your point we weren't together >> we independently decided exxon should buy something >> i calm up with apache this is probably about a $25 billion deal, bigger than chesapeake and it would make sense for exxon in a

. >> thank you >>> occidental making an offer topping chevron's earlier bid. how will the bidding war play out in here to break it out is paul, a managing director. >> thank you >> you make it clear you think in the note that occi will not eventually be able to get the deal done because shareholders don't support it why bother doing it? what do you think the manager play book is >> they sent their first bid in january of 2019. there was no indication from occi there would be a potential stepout deal of this kind. that could have given a warning there would have been a big deal the stock hasn't been great at all over the past year or two. it's been a negative surprise, going hostile. it's unusual we haven't seen anything like this for decades where you have an oil company going hostile for another company at this scale. that's another massive risk untested management the ceo is taking here. where the shareholders support it now he's out on the road marketing the deal publicly. we'll see how that goes. according to her these are the first shareholder meetings sh

berkshire hathaway announced a $10 billion investment in occidental petroleum which will help occidental finance its takeover of anadarko. here's the deal. berkshire will receive 100,000 shares with a value of $100,000 per share, and will accrue dividends at -- okay, are you sitting down? 8% annually. nice, nice percent there. buffett has a history particularly during crises of making these types of preferred stock investments. for example, during the financial crisis, he did so for tiffany and goldman sachs and harley davidson. could this really be an indication of just how powerful greg abel, the energy vice-chairman and chairman of non-insurance business operations, really has become? the rumored heir apparent has been at the helm of berkshire energy since 2008 and oversees companies like bhe renewables, home services of america, midamerican energy, northern power grid holdings company, and precision cast parts, among dozens of others. even turning midamerican energy into one of the largest power suppliers in the country. so are buffett and abel total geniuses? let's get to our floor

would resume negotiations with occidental.darko agreed to sell itself to chevron for $33 billion. if anadarko decides to scrap that deal, it will be forced to pay a $1 billion breakup fee in a statement to cnbc, chevron says "we believe our signed agreement with anadarko provides the best value and the most certainty to anadarko's shareholders." we will see where that all heads, but likely higher, i assume if chevron wants, they're going to have to pay more. >> right. >>> disney's "avengeors: endgame" brought in a record $1.2 billion at the box office in its debut weekend it opened in a record 4,662 theaters and earned an average of $72,000 per theater is the superhero blockbuster enough to save them from the likes of netflix and amazon? eric davis is managing editor of fandan fandango what does this mean for fandango alone, people lining up for these seats? >> yeah, it broke records in terms of presales, all-time presales this movie now holds the record. first 24 hours, it broke that record it sold five times more tickets tha

if you are occidental then you are a bit larger than anardarko.ith that said, are you going to go after them to a hostile fashion? it can make you a target, i don't know guy, we want to let people know that this was competitive and that certainly from the occi people perspective, they are wondering what do we have to do here we have the better price >> david, i do know anadarko is a company that'll take over 30 years. so david, there is simmer ex and pioneer. when you said this about occi, i have to believe this is the first time that it makes sense everything goes up it is usually a fool's game. these companies have language because permanent is going to landlock is the speculation gaining this time worth playing >> i don't know. perhaps it is. i am curious to see your thoughts, do you think occi and anadarko will make a good combination? >> everything is in anadarko is jealous of chevron because it is a great stock. occi i don't know she has double downed on premium and i think decent prices but people love chevron. we know why, chevron was on "

i spoke to the ceo of occidental in relation to the potential merger between occidental and anadarko.is what she had to say. >> we always look at the $40 to $50 range and make sure any decisions we make would be successful in that range of oil prices. if we do that, we will always be successful and we can lower our risk. alix: that is h when he five dollar upside to where we are right now if you take a look at brent. what are companies going to do with that cash? tom: they are going to need it. capital intensity of the business is very much in place. a lot of infrastructure spending still needs to be done. i am not too worried about them having more progress than they need. but that differential is such that there is room for some pleasant surprise as people look forward from here. in the first quarter for the earnings being reported now, let's keep in mind we are 13% below the pricing of a year ago. the impact of that is what is reflected in the earnings reports we are seeing now ahead of the announcement. seeing forward, we will pretty good quarter to quarter improvements by virtue

occidental share trading at 63.43.5% there has been all sorts of concerns about occidental deal was for real or get the financing. >> it is expensive capital >> it is very expensive capital. it is kind of bershire's play book though. >> this is genius. >> bank of america you know we did have dwight scott on from black stone this morning. he was saying people have run from the credit there because they did not want to get involved in this thing this is $10 billion that goes straight wortowards it anadarko looks like it is up on this news. will chevron come in with a higher offer or is this something that occidental will walk away with chevron share is up by 2%. we talked about it yesterday when you see chevron up, kind of solidify the idea that they don't think michael wirth coming back in the premium basin, they have been able to do a lot of scale that chevron has and it would be important to them. occidental thinks that's it is important for them breaking news on this is bershire hathaway is committed to invest in $10

occidental one of the worst performers for the s&p, down 3.4% after it put up its bid for anadarko.for norfolk southern and at&t, and earnings winner and an earnings loser. the railroad company doing well, beating first quarter estimates and operating margins. at&t a disappointing quarter, down 3.3%. they lost revenue and wireless subscribers. the big question is, with stocks at record highs, what is next? let's take a look at a chart we did analyze with kevin kelly yesterday with a very clear message. in blue, the s&p 500. in white, the vix. we see last year, during the first spike in volatility, the vix went sky high and the s&p 500 down to about 2600. then they diverge. we see a reconnection. now we have this big divergence. kevin kelly of benchmark investments says it is clear we will see a reconnection between the vix and the s&p 500. it is tough on timing when you could see sort of a capitulation to the downside, but definitely a chart to keep an eye on for a sign of volatility ahead. vonnie: thank you for that. we will be back to you shortly. still ahead, the legacy of sergio

oil stocks much in play with chevron and anadarko and occidental. is suddenlyko everybody's favorite bride. there is a fight going on around these assets. to give you a sense of how unusual this is, bidding wars and big oil do not go together. we had to go back more than a decade to 2005 with the unit count bidding. that was a deal that got him ashton controversy because the chinese were trying to make -- that got enmeshed in controversy because the chinese were try to make a deal on their own. that bidding war sputtered out. anadarko's up, chevron is up. the only shares down our occidental, and that is a potential concern. we are waiting for it chevron comes back and makes a higher offer. david: that is the question. , it isread the language legal language. if you find this to be a superior bid, you have a limited time to match or better that been. anadarko had this deal on the table when they agreed to the chevron deal. there was something about the deal that was not that attractive to the board a couple weeks ago. what they're doing now after hea

. >> ya habÍa caÍdo la noche cuando elestruendo sacudiÓ al barrio el occidente de bogotÁ.j marcaba las 8:15 de la noche cuando la camioneta que venÍa a una velocidad endemoniada arrasÓ con todo a su paso hasta quedar incrustada dentro de la sala de la vivienda. doÑa gladys recuerda que dentro de la preocupaciÓn padecieron bajo los escombros. su hijo agonizaba. >> llegÓ mi mamÁy de repente la miro comenzÓ a convulsionar. >> le sacÓ un ojo y la costilla. >> el hijo de doÑa gladys habÍa salido de la casa como todos los sÁbadosiba caminando a su casa y una muertela muerte lo atropellÓ. fue un milagro que el accidente no cobrarÁ mÁs vÍctimas. justo en el cuarto donde colisionÓ la camioneta habÍa un hijo de la pareja.>> terrible. una situaciÓn terrible para la familiatanto para una como para la otra. >> al parecer luego de haber atropellado a otra mujer el irresponsable conductor tomÓ esta vÍa como ruta de escape. a la altura de esa esquina decidiÓ girar sin embargo perdiÓ el control de la camioneta y terminÓ estrellÁndose contra la casa blanca. >> quienes estaban en el dÍa del

we confirmed reports that occidental did also express an interest at a higher per share offer that hastal had come out in inn public, and it is honors arcos court. >> we feel very strongly as we've looked at on a darker that they have incredible assets, and combining their assets with our assets further enhances our dividends and production growth. ♪ >> president donald trump has said he will not nominate herman cain for a seat on the federal reserve board. in a tweet the president said this. "my friend herman cain will not be nominated for the receipt of the federal reserve board. hermann is a great who truly loves our country." kane has said he didn't want to go through the arduous vetting process. when he has made it? >> it doesn't look like you would have, and that is why he was able to get through it. for republican senators had said they would vote against him, 53-40 seven margin puts him below 50%, he wouldn't have been confirmed by the senate. that was a message the republican senators, who had not vetted him when he said he's the man i want to nominate, the vetting process is

that is sending occidental down 2%. chevron up. chevron in that scenario would end up walking away and taking a million-dollar breakup fee. it is off its highs. general electric is one of the major earnings winners. of more than 5% earlier on pairing some of the gains but adding substantial market overall. guy: plenty of granular bottom-up story to focus on and plenty of macular -- of macro top-down story. the gdp numbers out earlier on maybe giving the ecb a reason, not to cheer, but to relax a little bit. thatccelerated to .4%, topped estimates. the case for additional stimulus now looking less urgent. joining me is a global economist to give us a take on what we are seeing. can the ecb relax on the data strong enough to allow mario draghi to sit out his term on his hands? >> today's gdp release is good , but i do not think the data is strong enough to stop the ecb from reframing this accommodative policy. if you look at the data, it is up .4%, which is very strong. however, we have not got any breakdown yet and according to the