Arco Buys 14.9% Interest in Tricentrol
Fresh from a takeover fight for Britoil PLC, Atlantic Richfield Co. said Thursday that it has bought a 14.9% stake in Tricentrol PLC, another British oil company that is the target of a hostile suitor.
Arco said it had acquired 13.9 million of Tricentrol’s 93.4 million shares Thursday at prices of up to 180 pence, or $3.20, per share at current exchange rates.
Arco’s action came as a surprise to Tricentrol, which for the past six weeks has been fending off an unsolicited bid from Elf Aquitane U.K., a subsidiary of Societe Nationale Elf Aquitane, the French state-controlled oil group.
Elf, which last month got a meager response from investors with its 145-pence-a-share offer, boosted its bid early Thursday to 165 pence, or $2.94 per share.
But Arco’s bid “really has taken Elf Aquitane out of play,” Tricentrol spokesman Tony Mayes said in a telephone interview from London.
Elf currently owns just over 8% of Tricentrol.
Los Angeles-based Arco said it is considering increasing its Tricentrol holdings but declined to say if it plans to make a tender offer for the company.
Under British rules, if an investor increases his or her holdings beyond 20%, the investor must make a tender offer for all of the company’s stock.
The $3.20-per-share price Arco has paid for its holdings values Tricentrol at about $299 million.
An independent petroleum consultant hired by Tricentrol valued the company at 234 pence, or $4.17, per share--about $389 million for the entire company.
In the early 1980s, Tricentrol expanded into Canada and the Gulf of Mexico, but those holdings did poorly because of the collapse of the oil and natural gas market. Tricentrol sold them last year.
The company is focusing on the North Sea, where it has six fields with proven reserves and 30 others believed to warrant drilling.
Tricentrol has been hurt by heavy losses, and Tricentrol shareholders will vote next month on whether they want to proceed with the financing and remain independent or whether they would prefer to be acquired.
Six weeks ago, Arco became involved in a battle for control of Britoil, which also was being pursued by British Petroleum PLC. Last Friday, Arco said it intends to tender its 24% stake in Britoil to BP for a profit of $239.3 million before taxes and expenses.
Separately, Arco said Thursday that it will increase capital spending by 18% to $2 billion this year, with virtually all the increase going for oil and gas exploration.
