One of world’s largest conglomerates in energy sector, Reliance Industries Limited (RIL) is set to take stock of options so as to decide whether or not to challenge Chevron Corp’s bid for Atlas Energy Inc.
RIL was reported quoting, “We believe Reliance, as Atlas Energy's joint venture partner and a company with substantial financial resources, would have been the most natural and obvious potential transaction partner for Atlas Energy.”
This Indian energy major, led by dynamic Mukesh Ambani, has reportedly roped in Perella Weinberg Partners and Kirkland & Ellis to evaluate its options and look for possible directions in this matter.
Last April, Reliance had agreed to pay Atlas Energy Inc. $1.7 billion to form a joint venture and own 40 percent of Atlas's Marcellus Shale operations in the eastern United States. Following November, Chevron Corp announced their plans to buy Atlas for $3.2 billion.
In a bolt of surprise, Reliance said in the letter, filed by Atlas with the U.S. Securities and Exchange Commission on Tuesday, that it would like to evaluate options including whether it could be able to 'create incremental value' for Atlas anymore. Claiming that Atlas never approached Reliance to gauge the deal, even though they were left under the pretence that Reliance would be the ‘preferred partner’ should Atlas choose to pursue a whole-company transaction, RIL is now uncertain of the party.
The Reliance letter also said that Chevron's deal valued the Marcellus assets at a significant discount to the value attributed to them in the joint venture with Reliance. In their response, Chevron merely noted that Atlas stockholders would meet in Philadelphia on February 16 to vote on the deal.
Chevron at one point owned a 5% stake in the Jamnagar facility of Reliance Industries; which Chevron ultimately sold back to Reliance in 2009.
RIL has lately invested in areas such as shale gas so as to establish a foothold overseas and to expand its interests beyond petrochemicals, refining, conventional oil and gas exploration, and retail. This investment has the potential to not only one-up Reliance footing in the overseas quarter but also boost relative investments and expansion in sectors that Reliance Industries is associated with.Labels: Mukesh Ambani, Reliance Industries Limited, RIL