BP merger bonanza for Amoco executives
Thursday 13 August 1998
In addition, executives and directors of the company own a further 2.5 million shares worth $125m based on the value of BP's offer at last night's closing price.
A total of 3,000 employees out of the group's 42,000 workforce are entitled to stock options. The company's annual report for last year shows that at the end of 1997, 41.6 million options were outstanding.
An Amoco spokesman could not say what proportion were granted to the board, led by chairman and chief executive Larry Fuller. But of the 3.4 million options granted last year, 10 per cent or 370,000 shares were granted to Amoco's top five executives.
The BP Amoco deal, the biggest industrial merger in history, continued to send shock waves through the oil sector yesterday as dealers reacted positively to the news. The value of Amoco, based on the all-paper offer from BP, rose to $49bn or $51.36 a share. The BP share price drifted down 1p to 794p as arbitrageurs moved in, dumping the stock and buying Amoco instead as a cheap way back into BP shares. BP is offering just under four shares for every Amoco share in a deal which will give it 60 per cent of the combined group.
As BP chairman Sir John Browne briefed US analysts in New York on the deal, the markets continued to react warmly to the deal. Salomon Smith Barney said the merger was strongly positive for both stocks, put a target price of pounds 10 on BP shares and $66 on Amoco stock. Alan Marshall of James Fleming in London said it was possible Amoco shareholders would hold out for a higher price from BP.
The deal will have to be vetted by both the European Commission and the US Federal Trade Commission or Justice Department but analysts foresaw few regulatory hurdles.
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