(Reuters) -Shell PLC works with advisers to assess a potential acquisition of Rival BP PLC, although it expects more and more drop in stock prices and oil before deciding to continue an offer, Bloomberg News reported on Saturday, citing familiar people.
The major oil has discussed more seriously about the feasibility and the merits of a takeover with its advisers in recent weeks, according to the report, adding that any final decision will probably depend on the rival stock slide.
For several years, BP and Shell were almost equal, but in recent years, Shell has reached almost double the size of BP, with a market value of around 149 billion pounds.
Friday, when asked for a possible takeover offer for BP, Shell’s, CEO Wael Sawan told the Financial Times that he prefers to buy more stock of shells. A Shell spokesperson confirmed the comments.
When he was asked for a call for results concerning Shell’s ability to launch significant acquisitions, he said that “we must have our own house in order” and have “more work to do” despite progress in the past two years.
A takeover of his London Cross-Town rival would make Shell an even greater force in the world energy industry, which gives it a scale to compete with Exxon and Chevron. A merger would probably certainly invite a regulatory examination, given the size of the agreement.
Shell This week has reported solid results of the first quarter exceeding expectations for profit and launched a share repurchase of $ 3.5 billion.
Shell can also wait for BP to hand their hand or another pretender does not move, and his current work could help him prepare for such a scenario, Bloomberg News from Bloomberg told Bloomberg.
The deliberations are in the first stages and Shell can choose to focus on the acquisitions of action and bolted acquisitions rather than a megamenger, added the report.
“As we have said on several occasions before, we focus heavily on the capture of Shell’s value by continuing to focus on performance, discipline and simplification,” said a shell spokesman when he was asked about the report. BP refused to comment.
Under pressure to improve profitability and cost reduction, the chief of the BP Murray Auchincloss announced his intention to sell $ 20 billion in assets until 2027, reduces spending and buyout. He also announced the departure of his strategy manager when he tries to strengthen the confidence of investors.
Activist investor Elliott Investment Management had wanted a change of strategy manager because he is looking for higher available cash flows thanks to deeper discounts of expenses and costs, familiar sources told Reuters.
