(Bloomberg) — The chances that a rival oil company will take over bp Plc are slim right now, even as peers have been running the numbers, because of the firm’s size and complexity, said bankers from Moelis & Co.
“We can’t identify anybody in the U.S. that would be a buyer,” Moelis Chairman and Global Head of Energy and Clean Technology Stephen Trauber said in an interview in London on Monday. “We don’t really see any others globally that are buyers that view the assets as must-have.”
Shell Plc is “probably the one that fits the best” with bp from an asset and regulatory perspective, Trauber said. Bloomberg reported last month that the company has discussed the merits of a takeover with its advisers, he said such a deal would still be unlikely.
Shell began its pivot back to oil and gas from clean energy much sooner than bp, putting it in a stronger position today than its London-based rival. “I think Shell sees their way back much quicker than bp does,” Trauber said. “So why dilute that upside?”
At some point in the future, when Shell has further improved its valuation and balance sheet and “if bp still sits where they sit,” that could be a better time to make a transaction happen, Trauber said. “At some point you’ve got to think about all of the options if you don’t get the momentum in your share price that you want to see,” he said.
But until then, it’s a longshot for anyone to take out bp any time soon, Trauber said.
Meanwhile, bp’s $20 billion divestment program faces challenges. The biggest single potential asset disposal — lubricants unit Castrol — has “a limited universe of potential buyers,” Moelis Managing Director Ali Hassen said. “So it’s not a done deal, even if they run a process that is pretty competitive.”
If bp were to try to sell its portfolio of high-quality oil assets in the U.S., there would be lots of interest, but a deal on that scale could raise questions about the future of the rest of the company, Moelis Managing Director Muhammad Laghari said.
“The bar is going to be very high on separation, because then the question is going to be: What’s left over?” Laghari said.
