Reliance Hires Advisors to Explore Atlas Options
India's Reliance Industries might challenge Chevron's bid for Atlas Energy , according to a letter disclosed by the U.S. natural gas producer in a filing with the regulators.
"We believe Reliance, as Atlas Energy's joint venture partner and a company with substantial financial resources, would have been the most natural and obvious potential transaction partner for Atlas Energy," the Reliance letter said.
In April last year, Reliance agreed to pay $1.7 billion to Atlas to form a joint venture and own a 40 percent stake in Atlas' Marcellus Shale operations in the eastern United States.
In November, Chevron announced plans to buy Atlas for $3.2 billion.
Reliance said in the letter that Atlas filed with the U.S. Securities and Exchange Commission on Tuesday it would like to evaluate options including whether it could be able to "create incremental value" for Atlas.
The Reliance letter said at no time during the seven months of Atlas' discussions with Chevron, Atlas reached out to the Indian company to gauge its interest in a "possible company-level transaction."
The Indian energy major, controlled by Mukesh Ambani, the world's fourth-richest man with a fortune of $29 billion according to Forbes magazine, said it had hired Perella Weinberg Partners and Kirkland & Ellis to evaluate its options.
"We were very surprised by the announcement of your deal to be acquired by Chevron," Reliance told Atlas in the letter.
Reliance said during its joint venture negotiations with Atlas it was assured that the Indian company would be the "preferred partner" should Atlas choose to pursue a whole-company transaction.
A Reliance spokesman in India declined to comment on the development when reached by Reuters on Thursday.
The letter also said Chevron's deal valued Atlas' Marcelus assets at a significant discount to the value attributed to them in the joint venture with Reliance.
Reliance has been investing in new areas such as shale gas as it seeks a foothold overseas and seeks to expand its businesses beyond petrochemicals, refining, oil and gas exploration, and retail.
