Monday, July 19, 2010

BP (NYSE:BP), Apache (NYSE:APA) Start Asset Sale Talks Up Again

A cloud had been cast over the talks between BP (NYSE:BP) and Apache (NYSE:APA) over the weekend, as it appeared the deal could have been stalled on a couple of issues.

The major sticking point was over the price of the assets, which Apache has been dealing hard on, wanting to pay about $9 billion rather than the approximate $10 billion BP is looking for.

While talks have resumed, there's no word on whether the impasse on the price has been reached, as both companies have been holding strong in that regard, although there can be no doubt time is on the side of Apache.

BP has to be careful not to give in too much either, as if they decide to sell assets in the future, it would signal the willingness to give in on price, which could greatly cut the amount they raise, and possibly force them to sell more assets than they want in order to raise the capital they need.

It's unclear if the deal will go forward if a price compromise isn't reached.

The other point that needed to be addressed was contract language, but that hasn't be revealed as to the specifics at this time.

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