BP on bid alert as Shell takeover ban ends on Boxing Day

BP is poised for renewed takeover chatter as the six-month rule that barred Shell from bidding for its rival expires on Boxing Day, opening the door for a potential approach. The end of the blackout period reopens the question of whether BP could again become a target, even as the company reshapes leadership and strategy amid activist pressure and a shift away from an aggressive Net Zero push.

BP confirmed that Meg O'Neill, currently chief executive of Woodside Energy, will become BP's chief executive in April, replacing Murray Auchincloss who has stood down with immediate effect. New BP chairman Albert Manifold said the group needs “increased rigour and diligence” to drive transformative changes to maximise value for shareholders. Analysts said the leadership shake-up is unlikely to quell bid chatter before O'Neill arrives.

Analysts said talk of a sale or partial sale could intensify as BP recalibrates under new leadership. Maurizio Carulli, an energy analyst at Quilter Cheviot, said takeover chatter will inevitably surface and that investors should expect some uncertainty in the near term. He noted Shell’s history of courting rivals under new management, pointing to its 2015 £47 billion purchase of BG Group after Helge Lund took charge of Shell; Lund later left BP after being ousted as chairman under pressure from activist hedge fund Elliott, which owns about 5% of BP and has pressed for asset sales and a pivot back toward core fossil fuels.

Under O'Neill and Manifold, another outsider, BP may draw up plans for more radical changes that could mean the company becomes more open to offers for all or parts of the business, according to Henry Tarr, an energy analyst at Berenberg. In June, Shell dismissed media reports that takeover talks had occurred with BP. The statement effectively kept Shell out of the running for six months, a deadline that expires on December 26 and could allow renewed interest from the British group if BP remains a prime target.

Shell is understood to be wary of combining two of Britain’s biggest companies, but sources say ministers could pressure the government to renew interest if BP nears a foreign bidder. Derren Nathan at Hargreaves Lansdown said O'Neill may face a tough task in ensuring BP is not sold “for a song,” and investors will be watching to see whether she has a firm plan to shore up the balance sheet, improve profitability, and define BP’s role in the energy transition. Carol Howle, head of BP's trading arm, will run the unit until O'Neill arrives.

In a separate strand of the story, Shell and BP declined to comment on the situation as the market weighs potential scenarios for BP’s future amid shifting leadership and a changing energy landscape.