Sleeve doubles when he rejected the acquisition of rivals BpAnd claims that it has “no intention” to submit an offer and at the same time cause a British law that prohibits the shell to offer BP with a few exceptions in the next six months.
The news from June 26th comes according to reports that that Shell entered early talks to buy BP in what would easily be the largest energy business of the century – if never. But when Shell appears to be aside to concentrate on the internal performance – at least for the time being – a financially struggling blood pressure remains left without other clear free than British energy giant is looking for a turnaround that his following “Hard Reset” through cost cuts, larger sales for fossil fuels and renewable energies.
“In response to the latest media speculation, Shell hopes that it was not actively considering an offer for BP, and confirms that it has no approach, and no discussions with BP were held in relation to a possible offer,” said Shell in a prepared explanation.
As part of a rule, the explanation was submitted in the Great Britain takeover code that the claims for the next six months are reduced, unless Shell has the agreement of the BP Board of Directors, another company from BP or there is a significant change in the circumstances. If you quote the code, Shell gives investors better that he focuses on his strategy and not on massive, debt loaded acquisitions at this moment.
BP rejected a comment.
Shell’s explanation of June 25th from Wall Street Journal followed that Shell was in early conversations for the potential purchase of BP, which even after earlier speculation and reported that Shell examined a possible deal to combine two of the largest large oil giants.
“At the moment, every takeover of BP from Shell will be a story of 2026 and it is unlikely that it will take place in 2025,” said Kathleen Brooks, research director of the XTB Brokerage House. “The BP’s share price is still below average its global colleagues and now that Shell is a potential buyer out of running, we see that BP has not repaired its position in the coming weeks or months.”
Challenges with big shops
In fact, only a small handful of companies could afford to acquire BP with its large but below -average market capitalization of $ 80 billion. The Shell, based in London, is the most obvious, but the otherExxon mobile and Chevron – come from or are in the middle of massive acquisitions. And the US supermajors could have a stronger challenge for the Kartler, even if they were interested, said Deborah Byers, Senior Adviser at the Energy Research and Investment company.
It is noteworthy that Shell switched his headquarters from the Netherlands from the Netherlands to London three years ago and transformed the name Royal Dutch Shell into Shell PLC.
“I think the British government would block a foreign purchase. Perhaps Shell is a white knight, and from a regulatory point of view in Great Britain, you would be fine,” said Byers. “You would think that Britain would not accept anyone as a shell – even a US major.”
And this does not take into account all debt, main and national and national regulators in order to acquire another global energy supermajor, said byers. Shell and BP each employ almost 100,000 employees, although they are both down in reduced, while Leaner Exxon Mobil, for example, has around 60,000 employees. Afterwards, Shell would have to subject a long period of sale to fulfill the balance sheet and cartel representation problems in different nations.
“Why should (shell) want to do that?” Byers said. “Do shareholders really want to grow? Or do they only want capital discipline and returns – either dividends or withdrawals? It has been a while since someone has been rewarded for growth in this sector.”
She said that the BP shareholders have to be “patient” when she tries his financial reset and recognize that BP has to do with Elliott Investment Management and others.
“The challenge is what is this patience time bar?” Byers said. “Your patience is perhaps two or three quarters, but you probably need a few years to work through some of these problems that are strategic rotations.”
Biraj Borkhattaria from RBC Capital Markets is also in a recently published analyst that the debt profile of BP, including the remaining liabilities from the Deepwater Horizon Tragedy 2010, is a “poisoned chalice for an purchaser”.
“The deal looks like most of the most important metrics of Shell Dilutive and we do not see the core strategic foundation for the combination,” added Borkhataria. “Since Shell Management has consistently launched strategic priorities since the beginning of 2023, the deal would also serve to contradict a large part of the comment and possibly undermine the credibility with its investor base. Shell would be much better contributing to continue his plan and to focus.”
