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Elf Says Its Counteroffer Beats TotalFina's

Elf Says Its Counteroffer Beats TotalFina's

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

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

"We believe that TotalFina's unwelcome offer both undervalues the contribution of the Elf shareholders to the combination and misses the opportunity to create a new industrial project," said Elf Chairman Philippe Jaffre. "Our proposal will lead to a focused and high-growth pure-play energy group, positioned with the resources to develop on a path comparable to that of the industry leaders, and a separate chemicals group owned directly by the shareholders."

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