BP eyes Middle East money to block potential takeover
09 July 2010
Based on opinion pieces, rumours and media reports that BP is vulnerable to a takeover, the British oil giant is looking at Middle East sovereign wealth funds (SWF's) to take a stake in the company, in a bid to strengthen its defences against a potential hostile takeover.
BP's stock has lost about half its value since the 20 April explosion on the Deepwater Horizon rig that caused a massive oil leak in the Gulf of Mexico, the largest oil spill in history.
In seeking money from middle east sheikhs, BP is following into the footsteps of many UK companies that do not trust their government to shield them from a fate similar to that of Cadbury, where the UK government had remained a mute spectator during the five-month acrimonious hostile takeover of the iconic 186-year old confectioner in February 2010 by the US-based Kraft Foods.
BP's embattled chief executive Tony Hayward yesterday met with the Crown Prince of Abu Dhabi Sheik Mohammed bin Zayed al-Nahyan to try and convince him that BP was open to his country's SWF taking a 10-per cent stake in the company.
Abu Dhabi has two SWF's, Abu Dhabi Investment Authority, which has assets estimated worht $627 billion and Mubadala, with around $13 billion.
BP is also reported to be looking to other SWFs in Qatar and Kuwait as well as Singapore's Temasek to take a strategic stake.
Over the week-end, a top Libyan oil official said that BP's shares are currently at a bargain price and the nation's sovereign wealth fund should invest in it.