Rumors were rampant this morning that Exxon Mobil was interested in acquiring BP (NYSE:BP), pushing the stock up in early trading, where in London it rose as high as 451.35 pence, and up to $43.98 in New York before pulling back.
At 11:45 AM EDT, BP was trading at $43.75, down $0.16, or 0.38.
BP had no comment on the speculation, and Exxon communicated the usual idea that it was "not our practice to comment on market speculation, rumors or media reports."
Even if a company was interested in BP, it seems they would wait until the decision on whether or not they would be considered grossly negligent in the Gulf oil spill, which could cost them billions more than they're looking at at this time.
Showing posts with label Exxon Mobil BP. Show all posts
Showing posts with label Exxon Mobil BP. Show all posts
Friday, November 5, 2010
Thursday, September 9, 2010
Exxon (NYSE:XOM) Starting to Grab Attention of Bargain Hunters
The recession and BP (NYSE:BP) oil spill put oil companies out of favor, but even with the price of oil rebounding strongly from about $40 a barrel in March 2009, to $74 recently, shares of ExxonMobil (NYSE:XOM) have languished.
Exxon has positioned itself strongly for long-term growth and diversification with its acquisition of giant natural gas producer XTO Energy, but the question is if Exxon and others will be able to move in the short term.
Gas and oil prices appear to be under downward pressure again, as concerns over the recession and a slowing economy have consumers continuing to hold back on spending.
Natural gas is so abundant that it'll probably be years before we see prices move up.
But Exxon could go the lower costs route, creating some margins there based on scale alone.
Stability, growth, a decent dividend, and an assured market make Exxon a bargain at this time. It's a play for those will a longer term outlook on investing though, as short term there is still a lot of volatility in the gas and oil sector.
Exxon has positioned itself strongly for long-term growth and diversification with its acquisition of giant natural gas producer XTO Energy, but the question is if Exxon and others will be able to move in the short term.
Gas and oil prices appear to be under downward pressure again, as concerns over the recession and a slowing economy have consumers continuing to hold back on spending.
Natural gas is so abundant that it'll probably be years before we see prices move up.
But Exxon could go the lower costs route, creating some margins there based on scale alone.
Stability, growth, a decent dividend, and an assured market make Exxon a bargain at this time. It's a play for those will a longer term outlook on investing though, as short term there is still a lot of volatility in the gas and oil sector.
Tuesday, September 7, 2010
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.
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.
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