Paris-based Elf Aquitaine submitted a counteroffer forTotalFina. Elf’s proposal would create two separate pure-play oiland gas and chemicals groups and annual pre-tax synergies of 2.5billion euros within three years of the combination. The dealoffers three Elf shares and 190 euros in cash for every five sharesin TotalFina, representing a premium of 10% to TotalFina’s closingprice on Friday July 16 (ex dividend). The transaction will beaccounted for under US GAAP using purchase accounting.

Previously, TotalFina, France’s largest oil company, made a $43billion hostile takeover bid for Elf. TotalFina offered Elfshareholders four of its shares to three Elf shares.

“We believe that TotalFina’s unwelcome offer both undervaluesthe contribution of the Elf shareholders to the combination andmisses the opportunity to create a new industrial project,” saidElf Chairman Philippe Jaffre. “Our proposal will lead to a focusedand high-growth pure-play energy group, positioned with theresources to develop on a path comparable to that of the industryleaders, and a separate chemicals group owned directly by theshareholders.”

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