According to a Bloomberg reporter’s tweet on Wednesday, activist investor Elliott Management is setting out to dissolute Noble Energy Incorporation’s $5 billion sales to energy company Chevron Corp.
Despite the revelation of Elliott’s stake in Noble Energy not being out, the Federal Trade Commission’s Hart-Scott-Rodino Act has granted the firm early termination. The grant has an essence when an investor buys shares higher than a certain threshold and decides to talk about topics like management changes or strategy.
After Wednesday’s tweet, Chevron shares went up 2.2%, while Noble shares climbed 2% in New York.
In a statement, Chevron spokesman, Branden Reddall, said that they believe the offer represents a fair value for the business and that the transaction will create long-term value for stakeholders of both the companies. Additionally, the deal will close in the fourth quarter this year and would increase Chevron’s exposure to the Denver-Julesburg Basin in Colorado.
With the deal being settled at 7.5% premium, it’s made only after a 60% loss of stock value from the year’s beginning, after the spread of coronavirus pandemic and subsequent fall of oil prices.
Elliott continues to find its way through changes for better positioning of the company to recover from the oil price slumps.