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

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Day In a Page

Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

Homeless Veterans appeal

Homeless in Wales can find inspiration from Daniel’s story
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Pot of gold: tasting the world’s most expensive tea

Pot of gold

Tasting the world’s most expensive tea
10 best wildlife-watching experiences: From hen harriers to porpoises

From hen harriers to porpoises: 10 best wildlife-watching experiences

While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching
Nick Easter: 'I don’t want just to hold tackle bags, I want to be out there'

'I don’t want just to hold tackle bags, I want to be out there'

Nick Easter targeting World Cup place after England recall
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore