BP’s shares shot up on Tuesday following a report that rival Royal Dutch Shell had considered a takeover bid during the Gulf of Mexico oil spill.
The newspaper report quotes sources as saying the Anglo-Dutch group thought about launching an opportunistic bid at the time, but was put off by the open-ended nature of BP’s liabilities from the spill.
Reportedly Shell is unlikely to now make a first move to buy BP.
Mic Mills, head of electronic trading at ETX Capital said BP was also being boosted by comments late on December 31 from the lawyer running BP’s gulf spill oil compensation fund that suggested damages payments could be half the expected level.
Since then the London Stock Exchange had been closed for the New Year holiday.
One dealer said the news reports focussed investors’ minds on the fact that BP shares were cheap compared to rivals. “BP remains cheap and vulnerable at these levels but I do not think a bid is likely.”