Standard Oil Still Pondering Bid by BP : Panel of Directors Unable to Agree on Fairness of Buyout Offer

Standard Oil, wrestling with whether to urge its shareholders to sell out to British Petroleum, said Tuesday that it has put off making a recommendation for now.

The Cleveland-based oil firm said a special committee of its directors had been unable to agree on the fairness of the $70-a-share tender offer because of differing views from investment bankers. British Petroleum owns 55% of Standard Oil, and some have claimed that the $70 price is too low and therefore unfair to the remaining 45% minority shareholders.

But industry observers speculated that the committee was simply buying time. “It’s clear the select committee did not have enough time to review what is a rather complex problem,” said an oil industry analyst who declined to be identified.

The company urged stockholders not to tender their shares until the committee reaches a final decision. Standard said the committee expects to make a recommendation “as soon as practical but not later than April 23”--five days before BP’s offer is scheduled to expire.

Committee members have been studying reports issued by Standard’s and BP’s investment bankers, which arrived at widely different estimated values for Standard’s shares.

Standard’s investment banker, First Boston Corp., concluded that the oil company’s stock was worth at least $85 a share. First Boston said BP’s $70-a-share offer, worked out by Goldman, Sachs & Co., understates the the operating income of Standard’s refineries, the company’s oil reserves in Alaska’s Prudhoe Bay and the value of its coal and metals operation.

So far, BP has said it has no intention of boosting its offer.