ARCO <ARC> SPIN-OFF SEEN AT 500 MLN DLRS
  Atlantic Richfield Co, considering a
  spin-off of a 20 pct interest in its chemical operations, could
  gain about 500 mln dlrs from the deal, industry analysts
  estimated.
      Yesterday ARCO's stock jumped as much as five points on
  rumors it was spinning off the chemical operations. Based on
  about 183 mln outstanding shares, the market in its frenzy was
  valuing the spin-off at about 900 mln dlrs, analysts said.
      Atlantic Richfield, aware of the rumors, issued a statement
  around mid-day that it was considering a sale of only 20 pct of
  the unit, leading investors to take profits.
      After the announcement, the company's stock retreated,
  closing at 93-7/8, up 1-3/8. Today it was off 1/4.
      "It was a smaller deal than expected and somewhat
  disappointing," said analyst George Baker at Smith Barney. He
  said rumors of the spin-off had been around "for a couple of
  days."
      Baker said the unit was very profitable but it wasn't
  getting the type of exposure Atlantic Richfield sought, and its
  value was not reflected in the company's stock price.
      Industry analyst Richard Pzena of Sanford C. Bernstein said
  the unit had operating earnings of 132 mln dlrs last year and
  he expected it to earn about 175 mln dlrs this year.
      Based on a multiple of 17 times earnings--which Pzena says
  chemical companies now sell for--the entire unit is worth about
  three billion dlrs, putting the 20 pct interest at around 500
  to 600 mln dlrs.
      Pzena said he thought the company was selling the stake
  because chemical margins had peaked, and he speculated the
  company would use the proceeds to pay down debt.
      But he added the possibility remained the deal would fall
  through. Yesterday, ARCO said the proposal had not yet been
  presented to its board.
      The chemical unit last year had revenues of 1.9 billion
  dlrs.