reuters/training/10078

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.