NEW YORK (TheStreet) -- Shares of Anadarko Petroleum (APC) - Get Report were increasing in late-morning trading on Thursday as Freeport-McMoRan (FCX) is continuing its plans to sell $2 billion worth of assets to the oil and gas company despite creditors expressing dissent for the deal, Bloomberg reports, citing sources.
The natural resources company will merge with its subsidiary FM O&G to dodge creditors' disapproval for the deal, Freeport said in a statement late yesterday. FM O&G is the Phoenix-based company's oil and natural gas unit.
Earlier this month, Anadarko agreed to pay $2 billion for Freeport's Gulf of Mexico assets. The transaction is expected to double the Woodlands, TX-based company's current stake in the Lucius development to about 49%.
Freeport creditors resisted the deal because it said the move violates their agreement with the company, Bloomberg noted.
The company initially sought consent from creditors to change the existing agreement, but Freeport said the offer expired yesterday evening after creditors hadn't given their approval.
Freeport has been working to clean up its balance sheet as earnings have recently slumped. The Anadarko deal would allow the company to cut its approximately $18 billion of debt, Bloomberg added.
Shares of Freeport were lower in late-morning trading on Thursday.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
TheStreet Ratings team rates Anadarko Petroleum as a Sell with a ratings score of D. This is driven by multiple weaknesses, which it believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks it covers. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: APC