“In light of recent media speculation, Shell would like to clarify that it has not been actively evaluating making an offer for BP,” the company stated on Thursday. This announcement means Shell is now subject to the UK Takeover Code, which generally prohibits it from making a bid for a period of six months.
There has been increasing speculation that BP, facing significant pressure after years of disappointing performance and the influence of a prominent activist shareholder, could become a target for a takeover. Following a report in the Wall Street Journal regarding potential talks with its larger competitor, BP’s shares surged in US trading on Wednesday.
However, Shell quickly rejected the report as “market speculation.”
BP has been grappling with ongoing underperformance largely due to a net zero strategy initiated by former Chief Executive Officer Bernard Looney. His successor, Murray Auchincloss, introduced a “reset” in February that included a shift back to oil, reductions in share buybacks, and commitments to divest assets.
According to Thursday’s statement, Shell has “not made any approach to, nor engaged in discussions with, BP regarding a potential offer.” The company declared, “It has no intention of making an offer.”
According to UK takeover regulations, Shell is now generally prohibited from making a bid for six months. This standstill can conclude early under specific conditions, such as if BP receives an offer from another party or invites a new approach, or if there is a significant change in circumstances.
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