HC Deb 24 January 1967 vol 739 cc221-3W
39. Mr. John Lee

asked the Chancellor of the Exchequer what instructions were given to the Government-nominated directors of British Petroleum with regard to the proposed takeover bid for the Distillers Company; and how such instructions related to the question of the maintenance of Government control of British Petroleum.

Mr. Callaghan

None. The Government were throughout in close contact with the Chairman of B.P.

40. Mr. Dickens

asked the Chancellor of the Exchequer what steps he has taken to ensure that the Government retain a majority shareholding in British Petroleum.

Mr. Callaghan

An agreement was concluded with the Distillers Co. Ltd., under which they will give the Treasury the right of first refusal to purchase any of their British Petroleum stock of which they wish to dispose.

The following is the text of the Agreement: (1) Letter from Sir William Armstrong, K.C.B., M.V.O., Joint Permanent Secretary to the Treasury, to Sir Ronald Cumming, T.D., O.B.E., D.L., J.P., Chairman of The Distillers Co. Ltd., dated 3rd January, 1967. With reference to the proposed acquisition by the British Petroleum Company Ltd., of the chemical and plastics interests of The Distillers Company Limited for a cash consideration and £19 million of B.P. Ordinary Stock, I am writing to put on record the agreement which has been reached between H.M. Treasury and The Distillers Company Limited regarding future disposals of the whole of the latter's holding of B.P. Stock thus acquired. This agreement is as follows:—

  1. (a) As and when The Distillers Company Limited wish to dispose (whether by sale, distribution or otherwise) of some or all of this holding of B.P. Ordinary Stock, they will by written notice give H.M. Treasury the right of first refusal to purchase some or all of the Stock in question. The said notice shall state the quantity of Stock of which The Distillers Company Limited wishes to dispose and the price at which it is willing to sell such Stock to H.M. Treasury.
  2. (b) Such right of first refusal will remain open for seven days in order to enable H.M. Treasury to decide whether or not to purchase some or all of the B.P. Ordinary Stock so offered.
  3. (c) If H.M. Treasury do not exercise such right in respect of any particular amount of the Stock so offered, The Distillers Company Limited shall be free during the period of six months thereafter to sell that amount at a price which, after deduction of all expenses, is equivalent to the same price as, or a higher price than, that specified in such notice.
I should be glad if you would confirm that this letter correctly represents the agreement which has been reached between H.M. Treasury and The Distillers Company Limited. (2) Letter dated 3rd January, 1967 from Sir Ronald Cumming to Sir William Armstrong. Thank you for your letter of the 3rd January. I confirm that your letter correctly represents the agreement which has been reached between H.M. Treasury and The Distillers Company Limited.