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David Prosser: Would anyone be allowed to buy BP?

Wednesday 05 January 2011 01:00 GMT
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Outlook Not a bad start to the year for BP investors, who saw the oil giant's shares put on almost 6 per cent yesterday thanks to rumours that Shell has been sizing it up.

It is not the first time these rumours have surfaced in recent months and Shell is far from being the only bidder talked about. Ever since the Gulf of Mexico accident in April sent BP's value tumbling, there has been the possibility that an opportunistic rival might seize on its weakness to launch a bid.

Why has something concrete failed to materialise? Well, one reason is the uncertainty that still surrounds BP's liabilities from the Macondo disaster, which may yet prove much larger than the company has made provisions for. But that can of worms aside, all of the putative bidders for BP would face some difficult regulatory hurdles in key markets such as the US, where competition laws would require some chunky divestments.

Even if those could be overcome, what would the British Government make of the sale of BP to a foreign bidder? This administration, like its predecessor, is relaxed about foreign companies buying up most British assets. But a bid for BP, despite its sullied reputation just now, would put that attitude to the test more than almost any other deal one could imagine.

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