By Brian Swint – Jan 4, 2011 9:05 AM GMT+0000
BP Plc, the company fighting legal claims after the biggest oil spill in U.S. history, rose the most in six months after the Daily Mail newspaper said Royal Dutch Shell Plc considered a takeover bid during the crisis.
Shares advanced as much as 5 percent, the most since July 16, and traded at 485 pence as of 8:26 a.m. in London. Shell considered a bid for BP last year when shares were at their nadir after the spill and is still interested in a merger, the Daily Mail reported today, citing unidentified people close to Shell.
Mark Salt, a spokesman for BP in London, declined to comment on the report. Shells press department wasnt immediately available for comment when contacted by phone.
Shell could be interested, and that would boost the upside to the shares, said Gudmund Halle Isfeldt, an analyst at DnB NOR ASA in Oslo. Most importantly, BP has done a lot to mitigate all the bad things that happened last year. Theyre on more solid footing now.
BP shares have recovered 60 percent since the end of June, when President Barack Obama and the company agreed to set up an escrow account to pay for cleanup and economic losses from the spill.
The stock also climbed after the lawyer paying victims of the spill said about half the $20 billion fund should be adequate to cover losses.
Kenneth Feinberg, who is administering the fund, said in a Dec. 31 Bloomberg Television interview that $10 billion may be more than enough to pay all the claims after BP suspended its dividend and pledged to sell up to $30 billion in assets to support the fund.
This opens the door for a dividend to be reintroduced sooner rather than later, said David Hart, an analyst at Westhouse Securities Ltd. in London. Weve got a very strong oil price at the minute and BP is heavily geared to that.
The Gulf Coast Claims Facility, which also covers clean-up and remediation costs, has paid about $2.7 billion to more than 170,000 claimants, mostly in temporary, emergency payments in the past four months. The facility has received more than 468,000 claims, according to its website. Feinberg said many claims lacked sufficient documentation to warrant payment.
To contact the reporter on this story: Brian Swint in London at [email protected].
To contact the editor responsible for this story: Will Kennedy at [email protected]
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