| BP <BP> DOES NOT PLAN TO HIKE STANDARD <SRD> BID | |
| British Petroleum Co Plc does not | |
| intend to raise the price of its planned 70 dlr per share offer | |
| for the publicly held 45 pct of Standard Oil Co, BP Managing | |
| Director David Simon said. | |
| "We don't seen this as any progressive bidding game," he | |
| told reporters at a news conference. BP now owns 55 pct of | |
| Standard's stock. | |
| Simon said BP had carefully considered the amount of its | |
| planned bid and he quoted an oil analyst, whom he would not | |
| identify, as saying BP's careful evaluation means the company | |
| is not going to raise its offer. | |
| "I think that (an increase) would be totally wrong. I think | |
| the price is very fair and it is much to early to speculate | |
| about ligigation," he said. "Let's wait and see how the offer | |
| runs." | |
| Another official declined to speculate under what | |
| circumstances BP might raise its bid. | |
| The BP official said the 70 dlrs a share offer is 7.2 times | |
| Standard's 1986 cash flow and 56 pct above an independent | |
| evaluation of the company's assets, including the value of its | |
| oil, natural gas liquids and natural gas reserves. | |
| He said the price Royal Dutch/Shell Group <RD> <SC> paid | |
| for publicly held Shell Oil Co shares in 1985 was 5.1 times | |
| cash flow. | |
| The BP official also said the 70 dlr bid is a 40 pct | |
| premium over Standard's stock price over the past year. | |
| BP Group Treasurer Rodney Chase said more than half to as | |
| much as two-third's of the 7.4 billion dlrs BP needs for its | |
| offer will come from existing sources. The rest will be | |
| financed by new debt. | |
| BP will draw in cash from its operating companies around | |
| the world and is also arranging a five billion dlr line of | |
| credit, he explained. | |
| The company's debt to equity ratio will rise 11 or 12 | |
| percentage points from the current 33 pct if the offer is | |
| completed, Chase said. But the ratio will be back below 40 pct | |
| within 12 months, he added. | |
| Chase also said 50 to 60 pct of Standard Oil's publicly | |
| held shares are held by financial institutions. | |
| Simon said Standard's board was informed of the offer on | |
| March nine and has been considering it since that time. | |
| He said BP does not expect any regulatory problems that | |
| would delay completion of the acquisition. "We have informed | |
| Washington of our intentions and we've already been an integral | |
| part of ownership of U.S. oil reserves," he pointed out. | |
| Simon said there is a good chance that current world oil | |
| prices of about 18 dlrs a barrel could be maintained, and that | |
| the more stable market is due mostly to changes in policy in | |
| Saudi Arabia and other OPEC members to control oil production. | |
| "We think there are signals that current conditions are | |
| more favorable than they have been for sometime," Simon said. | |
| "We have hopes for greater stability, but we do not see | |
| prices going much higher," he added. | |