BP is on bid alert as Exxon, Chevron, and Shell are all now said to be talking to their advisors about a possible takeover of the UK oil giant. They are speaking to their bankers and advisors regarding running the rule over BP towards the 800p a share level, according to City sources.
Goldman Sachs, JP Morgan, Bank of America, and Morgan Stanley are all said to be involved in this process. Time is of the essence while BP is without a Chairman. The former Chairman is rumoured to have been ousted due to having been involved in clandestine talks regarding a takeover of the company, as reported by the Wall Street Journal.
BP is in focus in the wake of the dismissal of Albert Manifold, which allegedly came in the wake of deal talks regarding the company. While this is stated to have not been associated with a possible takeover of BP, it is clear not only that the company is now vulnerable to a bid, and that that this would have been the explanation for Manifold being removed.
The current share price of BP is 545p, a bounce from the recent 500p low. The average analyst price target for the company is 622p -625p, and while the shares are up around £1 from their pre-Iran conflict level, it is also clear neither the bonanza conditions the company is enjoying currently, nor the vulnerability to a takeover has not been factored into the price.
In addition, the wait for the company appointing a new Chair leaves window for an opportunistic bidder to reveal themselves, especially given the way that the £84bn market cap vs the £125bn enterprise value is a lowly rating.
It is also the case that sub £100bn is pocket change for most of the company’s international rivals. This is especially the case given the recent surge for Crude Oil through $100 a barrel.
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