BP shares soar on talk of a deal with US oil behemoth ExxonMobil
SHARES in BP rose as the City speculated on a potential takeover by US giant ExxonMobil.
Yesterday’s market report touched on this speculation of what could be the biggest oil takeover in history and the rumour that Exxon has been gauging interest among BP’s biggest shareholders sent the share price up 16.7p to 470.7p.
“With the oil outlook much more positive (at least until the plunge in crude prices this week), the British icon looks more attractive once the weaker pound is taken into account,” said Chris Beauchamp, an analyst at IG. “This is one deal that won’t escape the regulator however, and it will also be a tough one for Downing Street.”
There were similar rumours surrounding the company in 2015, and even further back in 2010 after the Deepwater Horizon oil spill. After that event which killed 11 people and sent 3.2m gallons of oil into the Gulf of Mexico, its share price halved.
Since then, its shareholders are said to be distinctly unimpressed with its performance. But the limited gains suggest that traders are not completely sold on this takeover talk.
After a quiet day on the wider market, the FTSE 100 closed up 28.12 points, or 0.38pc at 7,343.08, breaking its six-day stint in the red.
BT Group rose the highest among blue-chip stocks after it finally agreed to split off its Openreach network division into a separate entity after intervention from Ofcom. It closed up 12.3p, or 3.7pc, at 342½p.
Among the biggest FTSE 100 losers were a handful of commercial property companies, including
Hammerson, falling 8½p to 581p, and British Land down 9½p to 612½p. Bottom of the pile was Intu, which fell 1.6pc or 4.7p to 277½p, with traders seemingly not sold on its announcement it was buying a shopping centre in Madrid, evocatively named Xanadú.
Segro, a FTSE 250 property company which rents out warehouse space, fell 28p to 468.6p after it said it was buying some expensive assets near Heathrow Airport, with Jefferies downgrading the stock to “underperform”.
Another share price going south on the FTSE 250, by 18.7p to 382p was
AutoTrader, driven by concerns raised in a note by Credit Suisse on the slowing sales of new cars and the rise of autonomous vehicles.
Esure soared 17½p to 240p after reporting a 19pc rise in pre-tax profits to £72.7m, despite the recent change to injury compensation calculations which has battered other insurers, causing huge falls in profits for the likes of Admiral and Direct Line.
Esure’s chief executive said that the company was “extremely well placed” to handle the changes, and added that it would pay out a special dividend after its demerger with its price comparison site GoCompare.
Meanwhile on the Dutch Stock Exchange, Dulux and PolyFilla maker AkzoNobel rose 4.7pc amid reports that PPG Industries is preparing a second takeover bid, after its £18bn offer was rejected earlier this week.