pounds 180m bid battle for Aran
The battle for control of the Irish oil company, Aran Energy, intensified yesterday as Arco of the US raised its offer to up to pounds 182m, and Statoil of Norway confirmed it may launch a counter-bid. It also emerged that Arco approached Aran last Friday in the hope of discussing an agreed takeover, only to be told that the company was in talks with a potential white knight.
Arco's renewed offer compares with an earlier bid of pounds 160m and is below the level expected by some City analysts. The value of the fresh offer could also fall if Aran's shareholders approve a deal agreed two weeks ago with Statoil in relation to the Connemara field off the west coast of Ireland.
Under the Connemara deal, Statoil has six months to decide whether to pay millions of pounds for the cost of drilling and testing in the area in return for taking half of the production from the field. Arco said that the arrangement transfers value away from Aran and has tabled an alternative offer of pounds 177m if shareholders agree the deal.
Arco also attacked Aran's decision to seek shareholder approval for the Connemara move on 23 October, the day before Arco's offer closes. The US group said: "Aran's decision to select a meeting date of 23 October 1995 is a blatant attempt to frustrate the due process of Arco's offer and, as a consequence, to complicate matters for Aran's shareholders."
Arco is believed to have increased its offer on the basis of the value of Aran's stake in the Schiehallion field west of Shetland - widely thought to be the main reason for the US group's bid. But Arco's valuation of Irpounds 55m is still far short of Aran's figure of Irpounds 77m.
The renewed offer values Aran's shares at up to 69.5p, compared with last night's closing price of 73.5p, an increase of 0.75p on the day. Michael Whelan, Aran's chairman and founder, said: "There is nothing in this that we can possibly begin to recommend. It is simply not adequate."
Investment column, page 22
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