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
"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
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. …