BP may bring in strategic investor to foil takeover bid
BP’s management’s plan to bring in strategic investor to ensure company doesn’t fall pray to predatory takeover bids while company’s massive oil spill in Gulf of Mexico spread to Texas. However company’s top shareholders are wary about the plan.
On the disaster’s 77th day, BP spokesman Mark Proegler confirmed that government tests showed tar balls that washed up on the Texas coast near Galveston were from the spill, but only about five gallons were found.
Texas joins Louisiana, Mississippi, Alabama and Florida among the states whose coastlines have been soiled by the largest offshore oil spill in US history.
BP is looking for a strategic investor among the sovereign wealth funds (SWF) of the Middle East and Asia. Such an investor could help ward off a takeover and raise funds for liabilities created by the spill. But some shareholders balked at the idea.
“We don’t think a strategic partner is at all necessary,” said one top-10 BP shareholder who did not want to be named. “We think this is just people trying to panic the company and stampede (them) into doing something to earn huge fees from selling new shares. Share holders will be saying ‘No, thank you’ to this and we have communicated this to the company.”
Another top-10 investor agreed BP “probably did not” need a strategic investor at the moment. Britain’s Sunday Times said BP’s advisers were trying to drum up interest among rival oil groups and sovereign wealth funds to take a stake of between 5 and 10 per cent in the company at a cost of up to 6 billion pounds ( US $9.1 billion). BP declined to comment.
A London banker said any SWF involvement might more likely involve the Far East than the Middle East. Separately, several newspapers reported interest among SWFs in buying some of BP’s assets in the Middle East and Asia. BP has said it hopes to raise US $10 billion from asset sales this year as part of its plan to fund a US $20 billion clean-up fund set up under pressure from US authorities.
BP shares have lost more than half their market value since the spill was unleashed on 20 April as a result of an explosion on a drilling rig that caused the undersea well to rupture. Attempts to stop the flow have not worked, with BP pinning hopes on a relief well that should be completed in August. Agencies
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