Citigroup (NYSE:C): BP (NYSE:BP) Close to Being Taken Over?

Increased talk is emerging on the possibility companies may be ready to make moves on BP (NYSE:BP) in order to acquire them at a bargain price, according to Citigroup (NYSE:C).

The belief is, rightly, that those companies which may be interested in BP would have to wait until they permanently plugged the Macondo oil well before making an offer. The reason would be to get a more accurate picture of the liabilities associated with it.

Now the time is approaching when the process will be completed, and the belief is there could be several suitors waiting in the wings to swoop in and take them over, with many believing the leading candidate is ExxonMobil (NYSE:XOM).

Two major elements are inluded in the drop in value in BP which makes them vulnerable to a takeover. One is the obvious loss in market cap, which is about $100 billion, depending on the share price at the time you're looking at it.

Second is the divestiture of assets, which is about $10 billion or so, and will surely rise to almost three times that before BP is through.

One final consideration would be how BP is designated from the oil spill. If they're found to be grossly negligent, the fines could be astronomical, which would surely affect the bid.

That combination puts the company in a much leaner and less expensive place than they were, and the ongoing uncertainty, especially in lawsuits, has to add more downward pressure on what a company could or would be willing to pay.

If Exxon is interested in BP, they can bide their time and wait until these things play out. After all, who in the entire world would want to get in a bidding war with Exxon? They wouldn't win.

China may have a chance, but the liklihood of that being cleared would be so small, Exxon, or possibly Chevron (NYSE:CVX), would have very little to be concerned with.

For any company interested, they don't want to wait for BP to get off the ropes and settle and grow too much, as it would cause the price to rise exponentially, and make it a much less lucrative deal than it would have been otherwise.

There's some time to wait, but the more things play out the better position BP would have to negotiate.

The Gulf situation isn't over yet, but it's getting close, and there should be a lot more clarity by the end of September for more data to come out and fairly accurate estimate of the long-term liabilities BP will face.