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.