With apologies to Robert Reich, I'm not referring to the United States government. However, if the true costs of the spill overwhelm BP
Given the plunge in BP's share price -- the company has lost more than a third of its value since Deepwater Horizon blew -- some bankers and analysts say BP is starting to look like takeover bait. The question is, who would buy BP, given its enormous potential liabilities?
Shell
(NYSE: RDS-A) and ExxonMobil(NYSE: XOM) are both said to be licking their chops. And already, flinty legal minds are dreaming up scenarios in which BP would file a prepackaged bankruptcy and separate the costs of the cleanup — and potentially billions of dollars in legal claims — into a separate corporate entity.
It's not surprising that Shell and Exxon are named; they're among the elite few that that could afford to buy or merge with BP. Other players might include Chevron
Assuming BP can spin off the liabilities to a separate company, and its valuable trove of deepwater gulf assets aren't permanently lost to regulation, my remaining concern about any future takeover or merger of equals is cultural. Can the Brits take a back seat to the Dutch or the French, or far worse, Texans? It sounds more like a sitcom premise than a recipe for corporate rescue.
A deal could happen if BP were truly crushed under the weight of a massive clean-up and punitive damages bill. But I think a more likely scenario is that the firm will go through an extensive rebranding campaign the likes of which haven't been seen since Philip Morris became Altria.
As for takeover candidates, I think it's more likely you'll see the 25% holder of the leaking Macondo well, Anadarko Petroleum
I'd love to hear what the Foolish community thinks. Will BP be a stand-alone company in five years? Will Anadarko? Or will opportunistic buyers swoop in and gain great assets at a discount? Sound off in the comments below.
