Mar 15, 2017
BP shares surged after reports of Exxon takeover
US energy giant ExxonMobil has reportedly gauged potential interest among BP's major shareholders regarding a possible takeover
British newspaper Evening Standard reported on Friday, sending BP's stock soaring to one-month highs in London and trading nearly 3 percent higher in New York shortly after opening. The two energy supermajors Exxon and BP have a few top shareholders in common, including BlackRock and Vanguard.
According to Evening Standard, which did not specify its sources, BP is reportedly worried that it could be a vulnerable target of an offer exceeding US$145.7 billion (120 billion British pounds).
Some of BP's shareholders are believed to be not very happy with the current share price of BP in London, which is currently around 30 percent lower than what it was before the 2010 Deepwater Horizon disaster. Since the worst oil spill disaster in US history, BP has often been the object of market speculation that it is a target of a takeover bid. BP is said to be worried that some shareholders, impatient to see a higher share price, may urge the group to accept a bid if it is unable to create more value for shareholders on its own, according to Evening Standard.
A possible takeover approach, if it materializes, would certainly face opposition by the UK government. In addition, according to Evening Standard, Anglo-Dutch major Royal Dutch Shell is said to be ready to come up with a bid of its own for BP and keep it on UK turf, should Exxon approach BP with a bid.
by Tsvetana Paraskova, OilPrice.com