BP share price: Oil major scraps takeover of Woolworths petrol stations

Group argues transaction cannot ‘meet strategic objectives’

BP share price: Oil major scraps takeover of Woolworths petrol stations

BP (LON:BP) has scrapped its takeover of Woolworths’ retail fuel and convenience business in Australia, the blue-chip oil major has said. The company explained that the deal, announced back in December 2016, cannot meets its strategic objectives.

BP’s share price has fallen into the red in today’s session, having given up 0.85 percent to 559.60p as of 12:33 BST, marginally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.68 percent lower at 7,575.91 points. The group’s shares have added just under 23 percent of their value over the past year, as compared with a near two-percent gain in the Footsie.

BP scraps Woolworths stations deal

BP announced in a statement today that its Australian unit will not proceed with the proposed acquisition of Woolworths’ retail fuel and convenience business, which was originally on December 28, 2016.

“Despite its best efforts, BP has determined the transaction cannot be structured to meet its strategic objectives,” the company said in the statement. The decision comes after in December last year, the Australian competition watchdog opposed the takeover, having flagged concerns about the deal earlier in the year.

Andy Holmes, BP’s chief operating officer for Asia-Pacific, told the Australian Financial Review that the company had explored ‘every available option’ to overcome the regulator’s objections, including selling sites and bringing in a third party, without success. 

“We can’t make it work,” Holmes said, as quoted by the news website. “We’re OK with that; we’re happy to move on to other things.”

Analysts on blue-chip oil group

Citigroup reaffirmed BP as a ‘buy’ today, without specifying a price target on the shares, while Goldman Sachs, which also sees the oil major as a ‘buy,’ set a valuation of 700p on the stock yesterday. According to MarketBeat, the FTSE 100 group currently has a consensus ‘buy’ rating and an average price target of 581.32p.

As of 12:56 BST, Thursday, 21 June, BP plc share price is 560.00p.

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