BP Shares Hit 6-Month High

Shares in oil major BP hit a six-month high on yesterday after reports rival Royal Dutch Shell considered a takeover bid, and that economic damages from its oil spill will be lower than forecast.
BP shares were up 5.6 percent to 491.7 pence by 1351 GMT (8:51 EST). The Daily Mail newspaper, citing sources close to the Anglo-Dutch group, reported Shell weighed an opportunistic bid for BP as crude gushed into the Gulf last summer, but was discouraged by the potentially uncapped legal liabilities.
The newspaper said Shell could yet bid for BP if another suitor emerged but Europe’s largest oil company by market value was unlikely to be the “first mover” for number two, BP.
Dealers and analysts including Mic Mills, head of electronic trading at ETX Capital, said BP was also being boosted by comments late on December 31 from the lawyer running BP’s gulf oil spill compensation fund that suggested damages payments could be half the expected level.
Ken Feinberg, the independent administrator of the $20 billion fund set up by BP told Bloomberg Television about half the fund’s assets should be adequate to cover claims for economic losses.
One dealer said the news reports focused minds on the fact BP shares were cheap compared to rivals. “BP remains cheap and vulnerable at these levels but I do not think a bid is likely.”