For some considerable time now the press has been offering up rumblings of a possible takeover of BP, given the disastrous events of the leaking well in the Gulf of Mexico over the last few months and the tumbling share price. I guess it’s really no surprise that BP has found itself the centre of many takeover stories and the resulting share movement has been influenced not only by the disaster but I would suspect by share speculators as well.
Over the last few days speculation seems to have risen to an even higher level. There have been articles linking ExxonMobil as a possible pursuer of BP and an article in today’s FT suggested US senators are pushing for an enquiry into BP’s role in the Lockerbie bomber’s release.
If you were working at the investment bank appointed to push ahead an acquisition of BP on behalf of your client, you would be rubbing your hands in glee when it came down to drawing up a list of factors that could be argued to support your client’s opening offer price and negotiating stance. Forget all the rigorous and detailed financial valuation models, the negative press and damage to the BP brand over the last few months would have to be factored in as “intangibles” when coming up with any offer. This would be before the long-term cost liabilities as result of the clean-up operation were added in to the financial mix as well.
The most fascinating part of all this is that should ExxonMobil make an offer for BP it would be with the blessing of the US government, which according to press reports has given permission for an approach to be made.
So a company that has been labelled as being responsible for the largest oil spill in US history, with its senior management hauled in to face the US President and Congress, is now seen as a potential opportunity for one of the country’s own major oil companies. From a US perspective – every cloud has a silver lining.