Shanghaiist has been alternately bemused and annoyed by the American media’s sudden widespread misuse of the word “hostile” in the context of a business acquisition. Shanghaiist has yet to
explore the matter further to see if this vocabulary breakdown is a worldwide phenomenon … but suspects it may be confined to America’s sinophobic borders since a recent survey showed that most of the world prefers China to America these days.
Yesterday’s big news was China’s state-owned oil company CNOOC‘s hefty (and late) $18.5 billion bid for California-based Unocal. If completed, this would be China’s largest foreign acquisition to date. Chevron‘s measly $16.6 billion bid does, however, offer strong incentives to shareholders, and is an option Unocal’s board of directors still appears to be leaning toward.
Shanghaiist wonders, however, if CNOOC’s big, late bid is actually “hostile” as so many news stories are so dramatically stating. According to Wikipedia, a hostile business acquisition occurs “when a company attempts to buy out another whether they like it or not … and can usually occur only through publicly traded shares, as it requires the acquirer to bypass the board of directors and purchase the shares from other sources.” From what Shanghaiist can tell, Unocal definitely wants to sell, and practically already has to Chevron. And unless Shanghaiist’s reading comprehension has completely deteriorated in the Shanghai summer smog, it also appears as though it is indeed the Unocal board of directors, on behalf of private shareholders, that is contemplating CNOOC’s bid, which they are in a position to accept or refuse.
CNOOC’s $18.5 billion bid is certainly ambitious and undeniably aggressive, but it seems to take an extra punch of sinophobia to really make it “hostile.” Last time Shanghaiist checked, $18.5 billion was a pretty friendly thing.