BP’s shares surged mid-morning on Friday on a day when other companies also fared well as the FTSE 100 pushed above 8,000
Shares in BP soared on Friday following reports that the state-owned United Arab Emirates oil company had contemplated, but ultimately dismissed, a takeover bid for the London-listed energy giant.
BP’s shares saw an increase of about 3.1% by mid-morning on Friday, contributing to a strong day for other companies as the FTSE 100 edged close to a record high. Shares in BP’s competitor, Shell, also climbed by 2.1%. On Thursday evening, Reuters reported that the Abu Dhabi National Oil Company (Adnoc) had concluded that BP was not the right fit and would not align with its strategy.
The report cited three sources. BP declined to comment while Adnoc did not immediately respond. Neither company provided a comment to Reuters. According to Reuters, sources revealed that Adnoc and BP had engaged in direct discussions and the UAE oil company had consulted investment banks about a potential deal.
In recent months, many UK companies have been targeted for takeovers as foreign investors perceive them as undervalued. Some have opted to leave London, or divide their listing between London and other markets. Currently, two companies are vying to acquire DS Smith, the London-listed packaging giant, for over £5billion.
Meanwhile, Flutter Entertainment, the gambling firm behind Paddy Power and Betfair, is planning to relocate its primary listing to the US. The company’s market value exceeds £27billion.
BP’s share price has been lagging behind some of its global competitors for years, leaving the company potentially exposed to a takeover bid from one of its rivals. The US Energy Information Administration reports that last year, companies in the oil and gas sector spent more on mergers and acquisitions than at any time since 2012.
This included ExxonMobil’s purchase of Pioneer Natural Resources for a whopping $64.5billion (£51.6billion) and Chevron’s $60billion (£48 billion) acquisition of Hess.
The past year has been somewhat stormy for BP. In January, former finance chief Murray Auchincloss took the reins as chief executive from Bernard Looney, who resigned after the board claimed it had been deceived about Mr Looney’s previous relationships with colleagues.
