Aran rejects pounds 160m bid from acquisitive Arco
Tuesday 22 August 1995
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
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 3 Ed Sheeran dedicates song to David Cameron
- 4 Now we know whose fault it is if you end up being murdered in Thailand
- 5 35,000 walrus gather ashore on north-west Alaska beach 'for a rest'
Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
Car tax disc changes: Five facts you never knew about your (almost obsolete) tax disc
The Aral Sea: Nasa pictures show how what was once the fourth largest lake in the world has become almost completely dry
Amal Alamuddin: Human rights lawyer's legal chambers forced to upgrade website following George Clooney wedding
Isis, we are told, is a 'clear and dangerous threat to our way of life'. I’m sorry, but I just don’t buy it
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...