Total S.A.: Is The Business Model Viable?
Richard Zeits • 10 Comments
Richard Zeits • 10 Comments
Fri, Oct. 7, 4:05 AM
- Total (NYSE:TOT) has agreed to sell its specialty chemicals unit Atotech to Carlyle (NASDAQ:CG) for $3.2B as the French oil major disposes of non-core assets to weather a slump in crude and preserve payouts to shareholders.
- Total is also working on the sale of some "mature" offshore oil fields in the North Sea and Africa this year, and plans to sell businesses in its Italian marketing and services division in 2017.
Mon, Jul. 25, 11:31 AM
- Total's (TOT -2.5%) stake in German surface finishing and metal plating company Atotech is expected to receive bids of more than €3B ($3.3B) from chemicals firms Umicore (OTCPK:UMICF) and Sinochem by tomorrow's deadline, Reuters reports.
- Arkema (OTC:ARKAF), a former TOT subsidiary, and BASF (OTCQX:BASFY) have looked at Atotech but are seen as unlikely partners, while P-E firms such as CVC, Cinven, BC Partners, Advent, Bain and Carlyle are expected to submit bids, according to the report.
- Atotech, which generates ~$1B in annual sales, is TOT's sole remaining specialty chemicals unit after the sale of Bostik to Arkema in 2014.
Wed, Jul. 20, 11:38 PM
- The way is clear for Exxon Mobil (NYSE:XOM) to buy InterOil (NYSE:IOC) after Oil Search (OTCPK:OISHF) says it is dropping out of the bidding.
- Oil Search and Total (NYSE:TOT) had jointly offered to buy IOC in May in a deal that valued the company at $2.2B; XOM topped the bid earlier this week with an all-stock offer Oil Search says totaled $2.5B.
- IOC owns a 36.5% stake in Papua New Guinea's Elk-Antelope natural gas field (TOT is the operator) and had proposed building a second gas project in the country to compete with the existing XOM-led PNG LNG facility.
- Oil Search and TOT say that allowing XOM to take over IOC could help speed up development of Elk-Antelope and that cooperation between the two projects could save ~$2B.
- "This scenario would be the lowest cost viable supply in the Pacific Basin," Wood Mackenzie analyst Saul Kavonic tells Reuters. "Those are the negotiations that will have to take place in order for that joint development to occur."
Wed, Jul. 20, 10:27 AM
- Total (TOT -0.7%) says it is analyzing Exxon Mobil's (XOM -0.3%) competing offer for InterOil (IOC -0.4%), its partner in developing natural gas in Papua New Guinea, by Oil Search (OTCPK:OISHF), but analysts say TOT is unlikely to challenge XOM in a bidding war.
- Analysts say it makes sense for TOT to let XOM have IOC, as using the Elk-Antelope gas field to feed an expansion of XOM's existing PNG LNG plant could generate double the return compared to building TOT's proposed $10B Papua LNG plant.
- TOT says in its statement that it would remain the largest shareholder of the Elk-Antelope joint venture with 31.1% interest while IOC owns 28.3% and OISHF holds 17.7%.
- The oil majors are targeting Papua New Guinea for growth as the quality of its gas, low costs and proximity to Asia's big liquefied natural gas consumers make it one of the world's most attractive places for gas projects.
Tue, Jul. 19, 12:48 PM
- Exxon Mobil's (XOM -0.3%) offer to buy InterOil (IOC -0.5%) for at least $2.2B shows “that rare corporate ability of planning a deal at the bottom of the commodity cycle that holds the promise of long-term returns,” Reuters’ Clyde Russell writes.
- Russell believes that XOM’s best option to expand its 6.9M metric tons/year capacity at its existing Papua New Guinea liquefied natural gas plant is to acquire sufficient reserves to justify building another liquefaction train in the country; IOC's Elk-Antelope gas field holds at least 6.2T cf of natural gas, and further drilling should expand this reserve.
- Russell says this means that XOM's bid, if successful, could underwrite the expansion of its PNG LNG project on a time scale that may see it deliver its first cargoes just as the surplus of LNG is expected to disappear in the mid-2020s.
- The big question, according to Russell is the next move from Total (TOT -1%) - operator and 40.1% owner of Elk-Antelope with IOC the next biggest holder at 36.5% - which has outlined plans to build its own LNG project in Papua New Guinea.
Mon, Jul. 18, 2:23 AM
- Exxon Mobil (NYSE:XOM) has made a superior $2.2B offer for InterOil (NYSE:IOC), outbidding Oil Search (OTCPK:OISHF) for the company's large natural gas reserves in Papua New Guinea and the possibility to export the fuel from the Pacific nation.
- The move pits Exxon Mobil, the world's biggest oil company, against Total (NYSE:TOT), which is backing Oil Search. The latter has at least until July 21 to submit a revised offer.
Fri, Jul. 15, 2:10 PM
- Total’s (TOT -1.4%) Atotech specialty chemicals division has attracted buyout interest from companies including China’s Sinochem and P-E firms for a potential sale that could value the business at as much as €4B ($4.4B), Bloomberg reports.
- The unit also could draw bids from Advent International, Bain Capital, Blackstone, CVC Capital Partners and Cinven to consider bids for the business, according to the report.
- First-round offers are said to be due as soon as this month and a decision on a buyer could come as early as September.
Fri, Jun. 3, 8:26 AM
- Total (NYSE:TOT) has started preparations for the sale of its Atotech specialty chemicals and equipment division, which may be valued at ~€3B ($3.4B), Reuters reports.
- An auction of Atotech, which generates ~$1B in annual sales from the manufacture of specialty chemicals and equipment for printed circuit boards and semiconductors, likely would kick off after the summer, according to the report.
- About a dozen P-E groups are said to be looking at Atotech, which is expected to be sold to a buyout group as there are no obvious strategic buyers.
- CEO Patrick Pouyanne has said that Atotech no longer falls within TOT's strategic vision.
Tue, May 31, 8:59 AM
- Proxy advisor ISS says it backs the $2.2B takeover of InterOil (NYSE:IOC) by Oil Search (OTCPK:OISHF) and recommends IOC shareholders reject an attempt by the firm's founder to oust the board at a meeting on June 14.
- ISS says IOC's founder and ex-CEO Phil Mulacek has "not made a compelling case for change," and recommends shareholders should vote for all of IOC's management nominees at the annual and special meeting.
- OISHF agreed two weeks ago on a $2.2B deal to acquire IOC and split a stake in the Elk and Antelope gas fields in Papua New Guinea with the field's operator, Total (NYSE:TOT); Mulacek has been critical of the deal.
Fri, May 20, 7:57 AM
- Oil Search's (OTCPK:OISHF) deal to buy up and divide with Total (NYSE:TOT) the assets held by their Papua New Guinea partner InterOil (NYSE:IOC) may knock as much as $3B off the costs of the country’s two liquefied natural gas projects and speed up development if they cooperate, OISHF managing director Peter Botten says.
- “This deal allows us to influence how Papua LNG and PNG LNG can cooperate,” Botten says. “There are substantial capital cost reductions and schedule optimization that can be done with cooperation."
- Taking over IOC will make it easier for OISHF and TOT to integrate their LNG plant with Exxon Mobil's (NYSE:XOM) $19B PNG LNG project, says Bernstein analyst Neil Beveridge.
- "Oil Search has always been keen on the two projects seeking ways to collaborate or combine to reduce costs, so the deal increases the possibility of the two developments integrating,” says Wood Mackenzie's director of Asia-Pacific upstream research.
Thu, May 19, 7:20 PM
- Oil Search (OTCPK:OISHF) agrees to acquire InterOil (NYSE:IOC), its Papua New Guinea oil exploration rival, in a deal valued at $2.2B.
- Oil Search is offering 8.05 of its shares plus a contingent value right linked to gas reserves at the Elk-Antelope fields in PNG for each IOC share.
- Oil Search also says it will sell to Total (NYSE:TOT) 60% of the interest acquired from IOC in the PRL 15 venture and 62% of IOC's exploration assets, subject to the closing of the IOC acquisition.
- After the deal, Oil Search's interest in the Papua LNG Project would increase to 29% and TOT's stake will rise to 48%, assuming the PNG government exercises its back-in rights of 22.5%.
- As takeover speculation grew in recent days, former IOC CEO Phil Mulacek criticized the company for considering asset sales at the bottom of the market.
Mon, May 9, 3:42 AM
- Total (NYSE:TOT) has agreed to buy Saft Groupe (OTC:SGPEY) for €36.50 a share, valuing the battery manufacturer's equity at €950M.
- "The combination will enable Saft to become the group's spearhead in electricity storage," Total Chief Executive Patrick Pouyanne said.
- Last month, Total announced the creation of a new division to help drive its ambition to become a top renewables and electricity trading player within twenty years.
Wed, Mar. 23, 10:14 AM
- Total (TOT -0.7%) CEO Patrick Pouyanne is the latest energy chief to oppose Halliburton’s (HAL -1.5%) bid to buy Baker Hughes (BHI -1.2%), telling Bloomberg at the Scotia Howard Weil Energy Conference, "Obviously when you have less competition in service providers, I’m not in favor."
- Other oil companies have complained to regulators about the proposed tie-up: Chevron's (CVX -1.6%) Brazil unit said the deal could reduce to two from three the number of large service providers for certain products for drilling and completing wells, such as completion tools and cementing services.
- The deal was stalled again by the European Commission on Monday, as HAL and BHI continue to face regulatory hurdles on both sides of the Atlantic.
Sep. 21, 2015, 9:19 AM
- Suncor Energy (NYSE:SU) agrees to acquire an additional 10% working interest in the Fort Hills oil sands project in Alberta from Total (NYSE:TOT) for $310M, increasing its partnership share in the $15B project to 50.8%.
- As a result of the deal, SU's incremental capital increase to Fort Hills is estimated at just over $1B, of which ~$700M is remaining project spending.
- SU says project engineering is more than 90% complete and construction more than 40%, placing Fort Hills on track for first oil in Q4 2017.
- Following the purchase, TOT will own 29.2% of the project and Teck Resources (NYSE:TCK) will continue to own the remainder.
Apr. 8, 2015, 3:48 AM
- European energy shares are having a party in early trading following confirmation of Shell's blockbuster deal to buy BG Group for $70B.
- Tullow Oil (OTCPK:TUWLF) soars 11.5%, BP (NYSE:BP) is +4.2%, Repsol (OTCQX:REPYY) +2.2%, Total (NYSE:TOT) +1.3% and Eni (NYSE:E) +1.5%. The STOXX Europe 600 Oil & Gas index is +5.4%.
- "The deal is done on a net asset value basis, and the good price tag is set to trigger some re-rating across the whole sector," says a Paris-based trader.
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Dec. 3, 2014, 7:58 AM
- The plunge in oil prices has erased more than half of Tullow Oil’s (OTCPK:TUWLF, OTCPK:TUWOY) market value since June, and Bloomberg reports that management is now concerned the company could be vulnerable to a takeover approach by a larger oil and gas producer.
- Tullow offers “a significant operating position that would not look out of place in the portfolio of a larger company,” says Societe Generale's David Mirzai, adding that the drop in oil prices “would certainly make it a lot easier to win the investor base around than in previous years.”
- Total (NYSE:TOT), Cnooc (NYSE:CEO) and Exxon (NYSE:XOM) would be among logical bidders since they’ve expressed interest in African assets before, BMO says, adding that a buyer would not need to contend with obstacles such as a poison pill or dual-class stock structure.