Arco Board Meets; Major Announcement Scheduled

Atlantic Richfield is scheduled to make a significant announcement this morning amid speculation that a financial restructuring of the Los Angeles-based oil firm is imminent.

There were indications that the restructuring may include spinning off some of the company’s properties.

Arco’s board of directors met over the weekend in Denver, but a company spokesman declined to say what matters were under discussion.

The spokesman, however, did say that no changes were made in executive positions.

The directors’ meeting came after a week of frenzied trading activity in Arco shares.

On the New York Stock Exchange, the price of Arco stock rose to $53, up $3.625, as 6.42 million shares changed hands.

Arco was the second most actively traded stock on the exchange, topped only by Unocal, which is in the midst of a fierce takeover battle with an investor group led by Texas oilman T. Boone Pickens Jr.

Arco’s stock trading activity came amid positive reports on the company by Wall Street analysts. The Dean Witter Reynolds brokerage has estimated the value of the company to be $80 per share if it were restructured, liquidated or taken over.

Although the company has proposed that shareholders adopt two anti-takeover measures at the May 7 annual meeting, the company is still considered vulnerable.

Arco already has undergone some financial restructuring, having recently repurchased 10% of its shares and increased its common stock dividends by 25%.

The company noted in its latest annual report that, while it continues to invest in its basic petroleum business, the short-term environment “has led us to re-examine our investment standards, undertaking only those projects that meet our rigorous performance objectives under a variety of economic scenarios.”

Last week, Arco reported an 11% decline in first-quarter net profits and a 10% decline in revenue.