Fund Company Stands to Gain From BP Amoco-Arco Merger

Capital Research & Management, the third-largest mutual fund family in the United States, is in line for a big gain from BP Amoco’s proposed $26.8-billion takeover of Atlantic Richfield Co., but Arco executives can expect a relatively modest reward.

L.A.-based Capital Research, which runs the American family of funds group, is Arco’s largest outside shareholder, with 7.9%, or 25.4 million shares, according to regulatory filings. Overall it has $275 billion under management.

Arco executives, on the other hand, are not major holders in the energy company--at least compared with insiders across corporate America--and their gains will be relatively modest, according to one analyst who tracks insider stock and option trading activity.

“These insiders hold, on a relative basis, few shares for insiders at a major company,” said Bob Gabele, director of insider research at First Call/Thomson Financial.

Capital Research, with 28 funds in its group, declined to comment on any details of the takeover agreement.

As of Oct. 31, Capital did say it held the majority of its Arco stake, 14.7 million shares, in the Washington Mutual Investors Fund. The fund is Capital’s largest, with $51 billion in assets.

The stake held by Arco’s chief executive, Mike R. Bowlin, is worth $67.1 million, based on both Arco’s latest filings with the U.S. Securities and Exchange Commission and data from Gabele.