Shell PLC on Thursday dismissed media reports it could be intending to approach smaller rival BP PLC for a potential merger.
Shell “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”, it said in an online statement.
“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”, Shell said. It was referring to restrictions imposed by the United Kingdom Takeover Code on an entity that has made a statement of not intending to make an offer for a company.
“We remain focused on delivering more value with less emissions through performance, discipline and simplification”, Shell said.
However, it added, “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: with the agreement of the board of BP; if a third party announces a firm intention to make an offer for BP; if BP announces a Rule 9 waiver or a reverse takeover; and if there has been a material change of circumstances (as determined by the Takeover Panel)”.
Earlier on Thursday The Wall Street Journal cited unnamed people familiar with the matter as saying Shell was holding “early-stage talks” with BP.
“Talks between company representatives are active, the people said, and BP is considering the approach carefully”, the Journal reported.
“Potential terms of any deal couldn’t be learned and a tie-up is far from certain, the people familiar with the matter warned”, it added. “Bankers working on behalf of the companies have been engaged in the discussions, which are moving slowly, the people said”.
Earlier in May Bloomberg reported, citing unnamed sources, that Shell was consulting advisers on a potential acquisition of BP but that it was “waiting for further stock and oil price declines before deciding whether to pursue a bid”.
According to Bloomberg’s sources, Shell may favor share buybacks and bolt-on acquisitions over a megamerger.
A Shell spokesperson told Bloomberg then, “As we have said many times before, we are sharply focused on capturing the value in Shell through continuing to focus on performance, discipline and simplification”.
To contact the author, email jov.onsat@rigzone.com
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