Shell Dismisses BP Takeover Speculation: No Plans for Acquisition
In a clear message to the market, Shell has stated that it has "no intention" of pursuing a takeover of rival fossil fuel giant BP, following rumors of a potential £60 billion acquisition. The company has committed to refraining from any formal offer for at least the next six months.
In an official announcement made on Thursday, Shell reiterated its earlier denials, dispelling media reports suggesting it was engaged in preliminary discussions with BP to form a massive £200 billion UK oil supermajor. Shell emphasized that it has not actively considered making an offer for BP and clarified that “no talks have taken place” between the two companies regarding a potential bid.
To strengthen its position, Shell issued its statement in accordance with rule 2.8 of the UK’s takeover code, which regulates mergers and acquisitions among publicly listed companies. This announcement imposes a six-month restriction on Shell, preventing it from making any formal offer to acquire BP. However, the company retains the right to reconsider its stance if another party expresses interest in BP, if it gains approval from BP’s board, if BP requests a waiver, or if significant changes in circumstances arise.
This clarification follows a late Wednesday statement from Shell aimed at countering media narratives that suggested the company was exploring a takeover of BP. Shell specifically addressed a report from the Wall Street Journal that ignited the speculation, labeling it as "further market speculation" and reaffirming that "no talks are taking place."
Market analysts have speculated that Shell’s recent surge in profits could position the company to capitalize on BP’s current struggles and relatively low market valuation. However, Shell’s CEO, Wael Sawan, has made it clear that the company is focused on share buybacks rather than pursuing acquisitions at this time.
In summary, Shell’s firm stance against a BP takeover underscores its commitment to strategic growth without the need for mergers, prioritizing shareholder value and internal investments over external acquisitions.
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