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To: diana g who wrote (56074)	12/5/1999 11:51:00 AM
From: marc chatman	Respond to of 95453

Hello, Diana: Yes, they will be compelled to sell. I don't know how much SLB is in index funds. I believe about 8-10% of the market is in index funds, but there are S&P 500, S&P 100 and other "managed" index funds in which SLB could be included. You could try asking SLB's shareholder info people for an estimate. I don't think they could separate out the index fund holdings, but perhaps they could guess if they are so inclined. As I understand it, when a stock moves into or out of an index, the index will separate out that stock and attempt to buy or sell gradually so as not to move the price too radically. Also, arbitrageurs will take positions, long or short, in a company coming into or out of an index, and then sell blocks to or buy blocks from the indexes on or after the effective date of the change. This also helps to soften the blow. I suppose that tool could be used in a transaction such as we have with SLB and RIG. Generally, the passive index funds won't make a move prior to a company moving into or out of an index, although there are some "managed" index funds which would. I don't know whether this rule would hold in the situation we have here (I assume you are suggesting the index funds could have shorted RIG already, or sold calls, or whatever), but my guess is it would hold.