Aran rejects pounds 160m bid from acquisitive Arco

MARY FAGAN

Industrial Correspondent

Aran Energy, the Irish oil company, has rejected a pounds 160m hostile bid by the US energy group, Arco. The attack from the US group coincided with successful new testing on the important Schiehallion oil field west of Shetland, which is operated by BP and Amerada Hess and in which Aran has a sizeable stake.

Michael Whelan, Aran's chairman and founder, said the bid failed to reflect the company's true worth. He rejected suggestions that Aran was hoping for a white knight, adding: "We are entirely capable of funding our own developments, including Schiehallion, from our own resources."

Arco, one of the largest US oil and gas companies, said its cash offer of 61.4p represented a 41 per cent premium over Friday's closing price of 44.5p and was "both full and fair". Shares in Aran rose by 23p to 67.5p amid market speculation over a possible counter-offer from another large group such as Lasmo or Enterprise.

Aran's shares are listed in Dublin, London and on Nasdaq. The company has about 15,000 private shareholders in Ireland which account for almost a quarter of the stock. The largest private shareholder is Mr Whelan, who owns 1.2 per cent.

The bid sparked rumours of possible insider dealing as traders pointed to a purchase of 150,000 Aran shares on Friday five minutes before the close of play. The deal was three times the normal market size of 50,000 shares. The Stock Exchange refused to comment on the situation.

The consensus in the industry is that Arco is primarily interested in the Schiehallion stake, since west of Shetland is now regarded as one of the most exciting areas around the UK.

But Terry Dallas, Arco's treasurer and vice-president, said Aran's interests in the Alba and Gryphon fields, which are already producing, were also important. "West of Shetland is a high-potential but high-risk area. Alba and Gryphon are sound and good fields. It is a balanced package," he said.

Mr Dallas said Aran fitted Arco's strategy of increasing its reserves outside the US. In 1987, less than 10 per cent of group reserves were overseas, rising to 21 per cent last year, and the UK is already one of the most important areas. "We wish that trend to continue. I do not know that we have a stopping point," he said.

Arco is to meet the Department of Trade and Industry - which will have to approve any takeover - this week.

The company also said it had requested a meeting with Aran through Morgan Grenfell, but had not heard from them. Mr Whelan said he was not aware that any attempt had been made to contact him. "I am always at the end of a telephone. There was no approach either direct or indirect."

Investment Column, page 18

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
scotland decidesIs a huge gamble on oil keeping First Minister up at night?
Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
News
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
PROMOTED VIDEO
Arts and Entertainment
Lionel Messi in action for Barcelona
filmSo what makes the little man tick?
Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
News
i100
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
Sport
Cesc Fabregas celebrates his first Chelsea goal
footballChelsea vs Schalke match report
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes the hobby look 'dysfunctional', they say
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Recruitment Consultant - Soho - IT, Pharma, Public Sector

£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week