Shares in UK oil giant BP surged Wednesday following a Wall Street Journal report that its bigger rival, Shell, was in talks to acquire the company, before mellowing after Shell denied the report.
Bloomberg had also reported in May that Shell was was considering a bid for BP, a merger that, if successful, would be “the largest oil deal in a generation,” the Journal wrote.
BP has been under significant investor pressure amid falling share prices, fueled by the company’s ill-fated push into renewables, management turnover, and operational difficulties. BP’s liabilities could render it a “poisoned chalice” for prospective buyers, RBC analysts said.
Any moves on BP by Shell or another company would represent the biggest test of the M&A environment yet since US President Donald Trump returned to office.