Shell has addressed recent reports suggesting they were lining up an offer for BP with a statement issued on Thursday squashing speculation of a mega deal.
Shell said in a statement:
‘In response to recent media speculation Shell wishes to clarify that it 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.’
The oil major continued to say it ‘confirms it has no intention of making an offer for BP’.
There has been little market reaction to the media reports or Shell’s subsequent statement. BP shares were flat at the time of writing on Thursday.
The deal, should it hypothetically go ahead in the future, would be one of the biggest M&A transactions between London-listed companies in history. It would also further reduce the number of major global companies listed in London by combining two of them at a time when London is struggling to maintain its appeal to multinational companies.
“Shell has denied media speculation of early talks to buy rival BP. Structurally lower oil prices are causing the majors to look at their options, but given Shell’s superior asset quality and balance sheet, any combination may be difficult for its shareholders to stomach,” said Derren Nathan, head of equity research, Hargreaves Lansdown.
“Cherry picking some flagship assets could be another option, but that’s unlikely to satisfy BP investors. For now, the focus for Shell is likely to remain on buying back its own shares.”