BP may sell Duckhams

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The Independent Online
British Petroleum, the cash-strapped oil group, is considering the sale of its Duckhams motor lubricants subsidiary following approaches from potential buyers.

Industry experts say the list of potential suitors could be long and may include Repsol, the Spanish group with a 4 per share of the UK petrol market, as well as the French companies Total and Elf.

Duckhams, acquired by BP about 20 years ago, operates at arm's length within the group.

A key attraction is the well- known brand name - backed by a television advertising campaign for its Hypergrade label - which could attract a price tag of about pounds 20m. However, the business has lost ground.

At one time, it was the leading independent motor oil company, vying with Burmah Castrol for the top position in Britain. But now Duckhams' UK market share among the independent suppliers is estimated at 15 per cent, compared with about 25 per cent for Castrol.

According to documents filed at Companies House, Duckhams made taxable profits of pounds 1.13m in 1990. Last year, the figure slipped to pounds 800,000 on unchanged turnover of pounds 24.4m.

In March, it acquired Duckhams Oils Ireland for about pounds 325,000.

Insiders say Duckhams is a likely candidate for disposal because BP already markets a range of lubricants under its own corporate label. The group may no longer consider Duckhams of strategic importance.

BP is aiming to raise up to pounds 1bn this year from a disposal programme designed to reverse a pounds 1bn cash outflow and cut an pounds 8bn debt mountain.