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UK government could step in to stop a BP takeover as rumours swirl off possible US interest in wake of Shell deal for BG Group

UK government could step in to stop a BP takeover as rumours swirl off possible US interest in wake of Shell deal for BG Group


The British government could step in to protect oil giant BP from any potential takeover amid rumours US groups ExxonMobil and Chevron could be interested in the firm.

BP became the target of takeover rumours following Royal Dutch Shell’s £47billion move to buy blue chip rival BG Group earlier this month.

The deal sparked speculation that a wave of other takeover deals would come for the sector following the tumbling oil price – which is down around 50 per cent since last summer – and the weak share prices of oil companies.

BP was reported by Bloomberg to have begun internal reviews of takeover scenarios and defence strategies with advisers including Morgan Stanley.

Now the UK’s government has said it would take steps to prevent any approach – even if it came from rival Shell.

Number 10 wants two large British based global oil companies to remain.

The Financial Times reported that Number 10 said: ‘The government talks to a wide range of UK businesses, as you would expect. It is in the UK’s interest to have British companies competing and succeeding at home and abroad.’

Last week experts at Liberum said: ‘BP appears on the chess board as one of the few remaining sizeable potential targets for a large synergistic deal in a low price environment.’
However some argue BP’s continued liabilities over the US Gulf of Mexico disaster in 2010 and its exposure to sanction hit Russia make it unattractive to bidders.

It is not the first time BP has been regarded as a target. Five years ago, when BP’s stock tumbled because of the Deepwater Horizon disaster, the UK government also analysed the likelihood of a potential hostile bid for BP and ways to respond to it, Reuters reported.
BP’s shares on the FTSE 100 index were lower in afternoon trade, down 3.5p to 474.9p ahead of the firm’s first quarter results, due tomorrow.

BP is expected to reveal a 60 per cent drop in first quarter operating profit to £1.4billion, according to Société Générale.

And on Thursday Shell is expected to reveal that its first quarter profit has more than halved to £1.6billion, according to analysts at Bernstein.

Shares in Shell were 12p higher at 2,078p today.


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