Just five months ago, BP was seen as a prime takeover candidate. Today, the narrative has shifted. The London-listed oil major’s shares have rallied more than 32% since April, outperforming both U.S. and European peers, as speculation of a buyout has faded.
Stronger performance and leadership reset
The turnaround reflects a combination of strategic adjustments, cost-cutting progress, new oil discoveries, and leadership changes. In July, BP named Albert Manifold, former CEO of CRH, as its next chairman. He formally takes over on October 1, bringing a reputation for executing successful corporate turnarounds.
CEO Murray Auchincloss has dismissed talk of potential suitors—including Shell, ADNOC, Exxon Mobil, and Chevron—saying the focus is firmly on growth. Shell, for its part, denied reports of interest in June.
Analysts argue the speculation was overstated from the start. “Shares have since done better, and the most recent catalyst was the selection of the new chair,” Morningstar’s Allen Good told CNBC.
Discoveries and investor pressure
BP’s recent string of oil discoveries has supported optimism. The company reported 10 finds so far this year, including a promising prospect in Brazil’s Santos Basin. In early August, BP posted quarterly profit of $2.35 billion, well above consensus estimates of $1.81 billion.
The gains have also been reinforced by activist investor Elliott, which disclosed a 5% stake in April. The hedge fund has been pushing for disposals, stronger cash flow, deleveraging, and higher shareholder returns—moves analysts say BP is beginning to embrace.
“BP’s resilience in the face of skepticism is telling,” said Russ Mould of AJ Bell, noting that a higher share price is also the company’s best defense against potential takeover bids.
Debt remains a concern
Despite momentum, BP’s debt burden looms large. Net debt stood at $26.04 billion at the end of Q2, only slightly reduced from Q1. The company aims to cut that to between $14 billion and $18 billion by 2027, a goal heavily dependent on delivering its $20 billion divestment program.
“If oil prices fall, BP is the most exposed among peers,” Morningstar’s Good warned. Rothschild & Co Redburn’s Peter Low echoed the caution, calling for further balance sheet improvement while highlighting the importance of upcoming updates on Brazil exploration and asset disposals.
For now, BP has stepped back from the takeover spotlight, but its valuation, debt reduction progress, and oil price trajectory will determine whether the momentum holds.
