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

BP has been placed on bid alert as the six-month ban on Shell pursuing a takeover of its oil-and-gas rival ends on Boxing Day, rekindling takeover speculation in the energy sector.

BP said it will welcome Meg O’Neill, the head of Australia’s Woodside Energy, as chief executive in April, replacing Murray Auchincloss who has stood down with immediate effect. The shift comes as BP’s new chairman, Albert Manifold, has signaled a need for “increased rigour and diligence” to deliver transformative changes aimed at maximising shareholder value. Analysts say the leadership changes are unlikely to quell bid chatter before O’Neill arrives.

Fresh voices at the top come as BP’s governance and strategy have drawn scrutiny from activist investors. Elliott Management, which owns about 5% of BP, has pressed for a quicker sale of underperforming assets and a pivot back toward BP’s core fossil-fuel business to cut debt and fund dividends. Maurizio Carulli, an energy analyst at Quilter Cheviot, said takeover chatter would resume in the near term and that uncertainty could persist until O’Neill establishes a clear plan for BP’s portfolio and capital allocation.

The prospect of a new leadership team raises the possibility that BP could be more open to strategic options, including asset sales or even a broader sale of the business, analysts said. Henry Tarr, an energy analyst at investment bank Berenberg, noted that under O’Neill and Manifold, BP might pursue more radical changes that could involve approaching offers for all or parts of the company. He cautioned that any shift would depend on how BP balances debt, profitability, and its role in the energy transition.

In June, Shell said reports of takeover talks with BP were inaccurate, a clarification that effectively paused any competitive bid under the City’s cooling-off rules. The six-month window ends on December 26, allowing Shell to revisit the possibility of launching a bid if BP remains in play. Separately, Shell’s chief executive Wael Sawan and chief financial officer Sinead Gorman reportedly blocked a plan to acquire BP earlier this year, and a key deals executive left the group, according to the Financial Times. Shell has indicated it remains cautious about combining two of Britain’s largest companies, though ministers could press it to renew interest if BP looks leaning toward a foreign sale.

O’Neill will not assume the top job until April, and Carol Howle, BP’s head of trading, will lead the business in the meantime. Even with a recent rally in BP’s shares, investors have not been convinced that Auchincloss and the board were executing a compelling strategy, and Manifold’s appointment in October signaled a fresh approach to governance and performance. Both Shell and BP declined to comment.

As the industry braces for potential deal activity, market participants will be watching how BP reshapes its balance sheet, improves profitability, and clarifies its stance on the energy transition under new leadership. The coming weeks could determine whether BP remains a standalone energy company focused on fossil fuels and low- or zero-carbon ventures, or whether it becomes an attractive target for a strategic bidder looking to capitalize on the next phase of the global energy cycle.