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Arco Raises Its Stake in Britoil Above 19.25%

December 23, 1987|From Associated Press

Atlantic Richfield Co. is moving quickly to significantly increase its stake in Britoil PLC, which is also the target of a takeover bid by British Petroleum Co.

Arco said that it had increased its stake in Britoil to 19.25% by late Monday, and made further purchases of shares Tuesday. On Friday, it held 14.7%.

Britain's Panel on Takeovers and Mergers met Tuesday to decide whether to block British Petroleum's offer of $2.93 billion (1.59 billion pounds) for the 70.1% of Britoil it does not already own.

However, no decision was expected to be announced until at least today.

Although Britoil is no longer a government-owned company, the government retained one share dubbed a "golden share" because it gives the government the power to approve or veto a takeover or merger.

Arco, the seventh-largest oil concern in the United States with assets of $21.6 billion at the end of 1986, has said it intends to increase its stake in Britoil to 29.9%.

Then, under an agreement with Britoil reached earlier this month, the Los Angeles-based firm would swap its international oil and gas operations for additional Britoil stock to boost its holdings to 49.9%.

However, the fate of that agreement was unclear because British law requires that if a suitor buys more than 30% of a company it must make a tender offer for all the company's shares.

Arco and Britoil would have to obtain a waiver from the Panel on Takeovers and Mergers for Britoil to recapitalize and issue the additional stock to Arco.

In mid-December, when Arco's holdings in Britoil were 7.7%, the government panel cautioned Arco that further purchases of Britoil stock would reduce the chances that a waiver would be issued.

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