UK government would oppose any takeover of BP: FT
(Reuters) - Britain's outgoing government has told BP Plc (BP.L: Quote) that it wants the company to remain a British industrial champion and it would oppose any takeover of the oil producer, the Financial Times reported.
The message follows the $70 billion deal to acquire rival producer BG BG.L by oil major Royal Dutch Shell (RDSa.L: Quote), which has sparked speculation of a larger wave of consolidation similar to the one at the end of 1990s during another oil price decline.
British officials have said the government would be "skeptical" about any takeover - even if it involves Royal Dutch Shell - because it wants the country to have two big global oil companies, the FT reported.
Officials acknowledge the government has few formal powers to block a bid, but a senior City figure briefed on government thinking said making its opposition so clear may deter any foreign bidder from offering a bid, the FT reported.
BP said it had no comment on the report. Representatives at 10 Downing Street declined immediate comment.
The FT quotes the government as saying: "The government talks to a wide range of UK businesses, as you would expect. It is in the UK’s interest to have British companies competing and succeeding at home and abroad."
The government, led by Conservative Party Prime Minister David Cameron, is facing election on May 7 and is neck to neck in approval ratings with the rival Labour Party.
The warning to any potential bidder for BP would not be the first of its kind. Five years ago, when BP's stock plummeted because of an oil spill in the U.S. Gulf, the UK government also analyzed the likelihood of a potential hostile bid for BP and ways to respond to it, industry sources have said.
BP has sold $50 billion worth of assets to pay off the damages caused by the spill and could still face billions in additional claims. The perceived weakness has sparked speculation that a cash-rich company like ExxonMobil (XOM.N: Quote) could attempt to acquire BP. Continued...