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Shares of

BP Amoco



Atlantic Richfield

(ARC) - Get ARC Document Solutions, Inc. Report

rose modestly Friday following reports that BP Amoco is willing to sell Arco's entire Alaskan production capacity in hopes of avoiding a drawn-out court battle with the

Federal Trade Commission

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over their proposed $30 billion merger.

The move would be seen as a peace offering by the companies, who are negotiating with the FTC in hopes of avoiding litigation. The FTC had voted on Feb. 2 to file a lawsuit seeking to block the merger.

It's also helped to calm investors, whose confidence in the merger would be raised if the companies were able to settle with the FTC before an expensive lawsuit is waged.

Shares of both companies rose Friday, with BP Amoco gaining 3/4, or 2%, to close at 44 3/8, and Arco gaining 3 11/16, or 5.7%, to close at 68.

Neither of the companies would comment on the reports, which first appeared in USA Today on Friday, or on any potential concessions to the FTC.

The concession would not be BP Amoco's first attempt to placate the FTC.

On Feb. 11, the companies confirmed their willingness to sell elements of Los Angeles-based Arco's pipeline operations in Cushing, Okla., addressing FTC concerns that overlapping assets in the key oil region could lead to price manipulation by the merged company.

Later, the two companies reportedly offered to sell half of Arco's Alaskan assets. But again the FTC said the offer was not enough, claiming the two companies would still control a majority of oil capacity in the resource-rich state.