Parliament May Intervene if Takeover Attempted : BP Hikes Britoil Stake to 24.9% in Buying Spree

A battle for North Sea oil producer Britoil heated up Thursday when British Petroleum Co. said it boosted its stake in the firm to 24.9%, paying about $416 million during a morning buying spree.

BP had been competing with Atlantic Richfield Co., which had earlier stepped in as a “white knight,” buying Britoil stock and working out a friendly deal with it to try to counter the BP stake-building, which brokers say may herald a takeover bid.

BP made a tender offer for Britoil shares earlier this month at 3 pounds ($5.52) per share for 29.9% of the stock.

The tender followed a “dawn raid” by BP when it snapped up thousands of Britoil shares even before the London Stock Exchange had opened for business.

Arco followed with its own “dawn raid” and then struck the friendly deal with Britoil, under which it would eventually own just under half--49.9%--of the British company.

After Arco stepped in, with part of its deal including a 3.50 pound ($6.44) a share counteroffer, hardly any Britoil shareholders took up the BP offer.

But BP started buying Britoil shares on the London Stock Exchange again Thursday, boosting its holding to 24.9% from 14.9%.

Spokesman Roddy Kennedy said BP had stopped buying the stock after Britoil shares hit 4.50 pounds ($8.28) in morning trading.

He would not say what BP’s next moves would be and declined comment on stockbroker speculation that the action was the prelude to a full takeover bid.

Brokers said about 128 million Britoil shares changed hands Thursday, before the stock fell back to 4.34 pounds ($7.98) when BP bidding petered out.

Britoil, a former state oil firm, controls about 7% of North Sea oil.

Meanwhile, the British government is considering whether to use its special powers to intervene in the current stake-building surrounding Britoil, a Treasury minister said Thursday.

The government sold Britoil to the public in two stages in 1982 and 1985 but retained a special share, which gives it veto power over any takeover attempt.

In a written reply to a question in the House of Commons, the financial secretary to the Treasury, Norman Lamont, said he was considering whether any of the rules for use of the special share would apply in the current situation.

A Treasury spokesman said the special share allows the government to act if it has reason to believe that someone is seeking to control the company.

Lamont said that “if a takeover bid is made, the government would consider all the circumstances and then decide whether it would be appropriate to use the powers of the special share.”