Shell has not bid for bp and is not actively considering such a move, it said in official statement on Thursday.
The Wall Street Journal had reported on Wednesday that Shell was holding “early stage talks” to acquire bp, citing “people familiar with the matter.”
Responding in an official statement, Shell said no such talks were taking place, and further added that it was bound by UK rules which ban it from bidding for bp over the next six months.
However, the Wall Street Journal was not the first publication to report a possible Shell-bp deal. Bloomberg had reported in early May that Shell was considering a takeover of bp.
bp’s stock has underperformed its peers markedly since 2020 when its pivot to renewable energy left it lagging behind when global and gas prices surged. But Shell’s CEO Wael Sawan has repeatedly said that buying back Shell shares would be a better use of money than pursuing a deal to acquire bp.
Shell’s statement said: “In response to recent media speculation Shell wishes to clarify that it has not been actively considering making an offer for BP and confirms it has not made an approach to, and no talks have taken place with BP with regards to a possible offer.”
The statement further went on: “This is a statement to which Rule 2.8 of the Code applies and accordingly Shell confirms it has no intention of making an offer for BP. As a result Shell will be bound by the restrictions set out in Rule 2.8 of the Code.”
Rule 2.8 of the UK Takeover Code restricts a person or a company who has publicly stated they do not intend to make an offer for another company, from making another offer or acquiring significant interests in the (targeted) company’s securities for six months, unless specific permitted circumstances arise.
In its statement, however, Shell did seem to leave some possibility for the deal by citing some of those specific permitted circumstances:
“Under Note 2 on Rule 2.8 of the Code, Shell reserves the right to set the restrictions in Rule 2.8 aside in the following circumstances:
a) with the agreement of the board of BP;
b) if a third party announces a firm intention to make an offer for BP;
c) if BP announces a Rule 9 waiver (see Note 1 of the Notes on Dispensations from Rule 9) or a reverse takeover (as defined in the Code); and
d) if there has been a material change of circumstances (as determined by the Takeover Panel).”
