DuPont May Sell Stake in Conoco

DuPont Co. will accelerate its exit from the oil business by selling as much as 25% of its Conoco unit to the public by year-end and offering shareholders a tax-free stock swap that will free DuPont of the rest of the oil company.

The initial public offering is expected to be among the largest ever, bringing in an estimated $3.6 billion. After the IPO, DuPont, the largest U.S. chemical company, said it will get rid of its remaining stake in Conoco by persuading investors to exchange DuPont stock for new shares of the oil company, a task it hopes to complete by the end of 1999.

DuPont said it is using the unusual plan to sell Conoco, the sixth-largest U.S. oil company based on sales, because it lets DuPont avoid billions of dollars in taxes and raises per-share earnings by cutting the number of outstanding shares.

DuPont said in May that it would sell 20% of Houston-based Conoco and use the proceeds to pay down debt and focus on drugs and biotechnology, businesses it expects to produce higher returns than selling oil, natural gas and gasoline. The offering was part of a longer-term plan to sell off all of Conoco “as soon as practical,” DuPont said in May.

Investors had questioned DuPont’s decision to proceed with the IPO at a time when both the stock market and oil prices are down, depressing the shares of energy companies. They appeared to applaud the plan Monday: Shares of Wilmington, Del.-based DuPont rose $2.88 to close at $61.63 on the New York Stock Exchange.