LONDON, April 12 - For any ambitious M&A adviser, there’s obvious appeal in pitching clients on a potential takeover of BP. The $110 billion energy group is cheap relative to rivals, and its new CEO is still learning the ropes. It also has assets that may appeal to cash-rich buyers like Abu Dhabi National Oil Company , which recently pondered a swoop on the British company, ReutersBP’s depressed shares make it an appealing target.
Yet any prospective bidder would face hefty obstacles. Russia’s invasion of Ukraine and the rush to find alternative sources of gas has underscored the critical status of energy suppliers. Britain has also become a more unpredictable destination for overseas buyers, as the UK government demonstrated recently when pushing through legislation to prevent a UAE-backed consortium from buying the Telegraph newspaper.
Any buyer confident of overcoming these hurdles would nonetheless face a lengthy period of limbo, prompting other oil groups to jump in. For now, a BP takeover may work best on paper.The United Arab Emirates’ state-owned oil company Abu Dhabi National Oil Company in recent months considered buying Britain’s BP, but the deliberations did not progress beyond preliminary discussions, Reuters reported on April 11, citing people familiar with the matter.
ADNOC ultimately decided BP would not be the right fit for its strategy, and political considerations also weighed on the potential move, Reuters said.Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day.