DOLLAR OFFER FOR BRITISH OIL FIRM

Press, Volume XCIII, Issue 27989, 8 June 1956, Page 11

DOLLAR OFFER FOR BRITISH OIL FIRM

(Rec. 9 p.m.)

LONDON, June 7.

A surprise £63,000,000 American bid to buy a British oil company staggered shareholders and the British Government today. The Texas Company, a £750,000,000 American oil combine, has offered this sum in a bid to gain complete control of Britain’s £30,000,000 Trinidad Oil Company.

Mr Simon Vos. chairman of Trinidad Oil, said last night that the offer was subject to certain conditions still under discussion.

He said: “A further announcement will be made as soon as possible, and in the meantime stockholders are strongly advised not to part with their holdings.” Under the terms of the deal, announced after the stock market had closed, the Texas Company will pay Trinidad Oil shareholders 80s 3d for each of the 15.700.000 units of 5s Trinidad Oil stock.

These shares were quoted on the London Stock Exchange last night ai 41s 6d. News of the offer—described as the largest take-over bid ever—appeared on the front pages of British newspapers today. Articles by finance writers assert that the offer poses problems as well as likely benefits for the British Government and the nation as a whole. The finance editor of the “Daily Mail” wrote: "From the British Government’s standpoint, the conclusion o'* the deal would mean the equivalent of £63,000,000 in dollars coming into Britain which would provide the Chancellor of the Exchequer (Mt Harold Macmillan! with a valuable ad dition to the gold and dollar reserves. Parting With Asset “On the other hand, the nation would be parting with another of its precious overseas assets and one oi the most important trading concern.in the Commonwealth,” the writei said. The finance editor of the Daily Herald,” organ of the Labour Party, said: “If the deal goes through, it will mean that the only really considerable source of all-British crude oil will come under the control of the AmeriCa ”perhaps it is not too late for Shell or British petroleum to push in a bio so that Regent can remain British.’ the “Daily Herald” said. The “Daily Express" said: “The American offer for these Empire assets is stupendous. “But what a deplorable business it is when a higher price is set on Empire resources in the United States than in Britain.” The commentator of the “Financial Times” said the “certain conditions” attached to the deal were presumably Treasury consent to the deal and to the transfer of the company from Britain. Biggest in Trinidad The Trinidad Oil Company is the biggest oil producer in Trinidad and is also actively concerned in western Canadian oil development, through Re gent Refining (Canada). In Britain it sells through the Re gent Oil Company—a massive organisation ranking as one of the nation’s “big three” oil firms.

Trinidad Oil has a 50 per cent, interest in the Regent firm. The othei 50 per cent, is held by Caltex, in which the Texas Company has an equal share with Standard of California.

The Texas Company, therefore, would increase its control of Regen I Oil from 25 per cent, to a controlling 75 per cent, if it gained control ol Trinidad Oil.