BP shareholders should snub cheap takeover bids

BP as takeover victim? That still seems a long shot, despite today's 9% rise in the share price and despite reports that Exxon Mobil and Chevron have approached the White House for clearance to make a bid. The biggest problem with the takeover theory, at least today, is that it is hard to see why BP shareholders would wish to encourage would-be predators looking to buy the company on the cheap. The company's self-help remedies are still – just about – credible. The leak in the Gulf of Mexico could be capped within a week of two if the latest "top hat" operation succeeds. Meanwhile, the $10bn (£6.7bn) asset-disposal programme has generated a queue of interested parties. True, they want bargains but at least BP looks to have a choice over which assets to sell. The Argentinian assets, which barely registered on investors' radars before the Deepwater Horizon disaster, could fetch $9bn. The big, long-term challenges loom as large as ever, of course. Even when the clean-up is complete, the legal uncertainties will remain. But those potential liabilities will also preoccupy would-be bidders. The case for surrendering to a lowball takeover rests on the idea that BP's name is so tarnished it will never do successful business again in the US and will face permanently-higher financing costs. Both of those fears could, conceivably, be realised. But BP shareholders would surely wish to wait 12 months to make to a proper assessment. Exxon, if it's serious about bidding, would try to bounce BP's owners into a decision rather sooner. But, as matters stand today, BP's investors don't have to play.