Business Notes Companies

It was a drastic response to a flagging market. Citing continuing declines in petroleum prices, Atlantic Richfield, the sixth largest U.S. oil firm, last week unveiled a sweeping reorganization program. The Los Angeles-based concern (1984 sales: $25 billion) announced that it will shed all its refining and marketing operations east of the Mississippi, including 1,100 gas stations. The company also intends to pare down spending on exploration by 50% and abandon its copper and molybdenum businesses. More dramatically, ARCO's board of directors voted to increase significantly the firm's long-term borrowing. As a result, total indebtedness could reach more than 50% of the company's net worth. With the additional funds, ARCO plans to buy back 21% to 28% of its 235 million shares of common stock.

Atlantic Richfield hopes that those measures will effectively close the door to hungry corporate raiders like T. Boone Pickens who have been going after energy companies in recent months. Says Sanford Margoshes, an industry analyst with Wall Street's Shearson Lehman Brothers: "ARCO has made itself an ugly duckling and less attractive to a predator." Investors liked the moves. ARCO stock closed the week at 62 1/2, up 9 1/2 points.