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British Petroleum Making $7.4 Billion Bid for Standard/$70 per Share

Article excerpt

NEW YORK - A $7.4 billion offer was made Thursday by British Petroleum Co. PLC to purchase the 45 percent of Standard Oil Co. it does not already own.

However, Wall Street bid up Standard's stock on speculation that BP will have to pay more.

Under BP's $70-a-share offer, the proposed deal would rank with Du Pont Co.'s purchase of Conoco Inc. in 1981 as the third largest corporate acquistion in the United States.

The two biggest deals occurred in 1984, and both also involved the oil business. Chevron Corp. bought Gulf Corp. for $13.4 billion and Texaco Inc. acquired Getty Oil Co. for $10.1 billion.

After BP announced its bid, Standard Oil's common stock jumped $6.50 a share to $71.37 1/2 in composite New York Stock Exchange trading.

"The history of these kinds of deals is that they sweeten them just a tad on the upside," said Bruce Lazier, who studies oil companies for the investment firm of Prescott, Ball & Turben Inc.

At a meeting with reporters in New York, however, David Simon, managing director of the London-based oil giant, did his best to discourage that speculation.

"I just want to make it clear that we don't see this as a progressive bidding game," he said. He said BP, the fifth largest industrial corporation in the world, considered the offer fair.

The two companies have had ties since 1970, when what was then called Standard Oil (Ohio) sold a controlling interest to BP in exchange for the British company's major oil and gas reserves in Alaska.

Standard Oil, the 11th largest oil concern in the United States, also has interests in coal, metal, mining, chemicals and other industries. It is the last of the five major oil companies formed in the breakup of John D. Rockefeller's Standard Oil Trust in 1870 to retain the name Standard Oil.

If successful in its bid, BP said it would merge its BP North America Inc. unit into Standard Oil. Simon said the company would remain headquartered in Cleveland under the Standard Oil name.

"We have no intention to change the management of the company, and don't expect redundancies (job cuts) of the type you normally see," Simon said.

"What we're really trying to do is build on the best of BP an the best of Standard Oil to make a real competitive international oil company," he said. "We don't want to see it as two halves - an American half and a British half. …