Arco/20"/dt1st/mark2nd

By DANIEL TAUB and JASON BOOTH

Staff Reporters

Is Atlantic Richfield Co. getting itself ready to be acquired?

Analysts say the staff cuts announced last week by the Los Angeles-based oil company coupled with the company's recent divestiture of its chemical and coal holdings and a management shakeup make Arco a more attractive takeover target than ever.

Arco officials insist nothing could be further from the truth.

"That's not why we're doing it, and I don't know if it helps or hurts in that regard," said Mike Bowlin, chairman and chief executive. "That has not been contemplated at all. It does not have any consideration at all in what we're doing. I have said publicly that I expect us to be an ongoing independent company, and that's what I expect us to be."

Nevertheless, analysts say that as Arco reduces its overhead, the company becomes more attractive as a target for another oil company seeking to expand its holdings.

"All it means is, if these were jobs that had to be cut, then an acquirer will look at it and say, 'They've already done some of our dirty work for us,'" said Norman Rosenberg, an analyst with S & P; Equity Group. "Maybe that was not the intention, but it is a byproduct of it."

Though Bowlin characterized last week's cuts which included several hundred positions in L.A. as a response to depressed earnings caused by declines in crude oil prices, analysts say it is impossible to know whether Arco is looking for a buyer or just fending off a takeover.

"If six months ago you had asked me whether Amoco (which was bought by British Petroleum in August) was looking for a buyer, I would have said, 'No way,'" said Jack Aydin at McDonald & Co. Investments in Jersey City, N.J. "But at this point, I wouldn't rule out anything."

There is little doubt among analysts that despite its restructuring and the recent increase in its share price, Arco remains a prime takeover target. "They probably remain on a lot of people's shopping list," said Michael Wang, an analyst at John S. Herold Inc. in Stamford, Conn.

Wang and other analysts point out that Arco has two primary assets that would attract a buyer: large oil and natural-gas reserves in Alaska and Indonesia and an extensive refining and distribution presence in the Western United States.

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