Shell Stock (SHEL) Surges as $100B BP Takeover Rumors Fuel M&A Frenzy
Big Oil's chessboard just got shaken—again. Shell shares (SHEL) are rallying hard after reports surfaced of a potential $100B BP acquisition. Because nothing says 'energy transition' like two fossil fuel giants playing monopoly with shareholder money.
The rumor mill goes brrr
Markets are pricing in M&A mania after whispers of hydrocarbon consolidation. Shell's stock chart looks like a crypto bull run—just without the actual innovation.
Due diligence or desperation?
A nine-figure deal would require regulatory miracles and investor faith. Good luck with that in 2025's ESG minefield. But hey, when your core business is sunsetting, why not roll the dice?
One trader's 'strategic vision' is another's 'Hail Mary pass.' The energy sector keeps proving that dinosaurs can dance—until the music stops.
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Shell said it had no intention of making an offer to buy BP after the Wall Street Journal reported yesterday that talks between the two firms had started. Shell’s shares rose 2.2% while BP dropped 0.4%.
Historic Deal
Shell said: “In response to recent media speculation, Shell wishes to clarify that it has not been actively considering making an offer for BP and confirms it has not made an approach to, and no talks have taken place with, BP with regard to a possible offer.”
Analysts said that given BP’s current valuation of £57 billion ($78 billion) and applying the 36% average bid premium seen on London-listed stocks so far this year, a potential bid could reach £78 billion ($107 billion). That WOULD represent one of the biggest takeovers of a FTSE 100 company in history.
Shell said its statement came under Rule 2.8 of the UK City Code on Takeovers and Mergers. As a result, Shell will be bound by the restrictions set out in Rule 2.8 of the Code.
This rules out a formal approach for the next six months.
However, this rule can be set aside, Shell said, under certain circumstances such as the agreement of the BP board or if a third party announces a firm intention to make an offer for BP.
Bidding War
Analysts believe that such a bidding war could emerge for BP, whose share price has dropped 15% over the last 12 months. It has ditched its green energy-first strategy to return to a fossil fuel focus following investor pressure, but questions still remain over the ability of its leadership team to make the turnaround succeed.
“Shell says it hasn’t been actively considering an offer, but that doesn’t mean it won’t do so in the future. Shell might fancy owning certain BP assets, particularly if it can acquire them at a good price. Owning the whole company is another matter,” said Dan Coatsworth, investment analyst at AJ Bell. “If Shell doesn’t MOVE on BP, there’s a good chance someone else will.”
He pointed to Saudi Aramco, ExxonMobil (XOM), Chevron (CVX), TotalEnergies (TTE), or a private equity consortium as potential bidders.
Is SHEL a Good Stock to Buy Now?
On TipRanks, SHEL has a Strong Buy consensus based on 7 Buy and 2 Hold ratings. Its highest price target is $88. SHEL stock’s consensus price target is $77.60 implying a 11.75% upside.
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