Shell has said it has “no intention” of making an offer for the rival fossil fuel company BP after speculation it had been planning a £60bn takeover, ruling out a formal approach for the next six months.
In an official statement to markets on Thursday, the company doubled down onthe previous day’s denialsthat it was planning a bid, after media reports that it was in early talks with its competitor to create a £200bn UK oil supermajor.
Shell said it had not been actively considering making an offer forBP, adding it “has not made an approach to, and no talks have taken place with, BP with regard to a possible offer”.
Shell toughened its stance against the growing market speculation by making the statement under rule 2.8 of the UK’s takeover code, a set of rules governing mergers and takeovers of listed companies.
The company said it would now be bound by the restrictions set out under rule 2.8, which means Shell will be blocked from making a formal offer to buy BP for at least half a year.
However, Shell reserved the right to make an offer in the event another company bids for BP, or if it has the agreement of BP’s board, or if BP asks for a waiver, or if there is a material change of circumstances.
The 2.8 announcement came after Shell was forced to issue a statement late on Wednesday to quash media reports it was in early talks to buy BP.
The company referred to a Wall Street Journal report that first raised claims of early talks between the two companies, as “further market speculation”. It added that “no talks are taking place”.
The market has been gripped by speculation that Shell would use its recent run of better-than-expected profits to make a play for its struggling rival while its market value is low.
Shell’s chief executive, Wael Sawan, wasforced to deny Shell’s rumoured plansof a BP takeover, saying the company was more interested in buying back its own shares than buying another company.
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BP has lost almost a third of its market value in the past year, and is now worth about £58bn, after a turnaround plan by its chief executive, Murray Auchincloss, failed to convince investors that it could recover from a botched attempt to become a net zero energy company.
According to the WSJ report, talks between company representatives were moving forward slowly while BP carefully considers the approach, but it added that a final deal to create a new oil company remained far from certain.
Shell said: “We remain focused on delivering more value with less emissions through performance, discipline and simplification.”