BP share price: Group reaches $175m settlement with investors over Gulf spill

BP Plc (LON:BP) has agreed to pay $175 million to shareholders who brought a class-action lawsuit against the company, accusing it of misleading them by understating the severity of the 2010 Gulf of Mexico oil spill to prop up its share price. The settlement, however, does not resolve other securities-related litigation in connection with the Deepwater Horizon disaster.

Investors have reacted positively to the news, with BP’s share price having gained 2.36 percent to 361.45p as of 09:23 BST, outperforming the benchmark FTSE 100 index which is currently 0.89 percent better off at 6,240.50 points. The oil major’s shares have lost nearly a fifth of their value over the past year, but are up about two percent in the year-to-date.
BP announced in a short statement last night that it had agreed to settle claims with investors who bought the group’s US-listed American Depositary Shares (ADS) soon after the explosion on the Deepwater Horizon rig on April 20, 2010. The FTSE 100 group will pay $175 million to those investors, with the payments to be made in 2016-17, subject to court approval.

“Investors saw their stock prices plummet after the Deepwater Horizon explosion,” Jennifer Freeman, a spokeswoman for the New York Comptroller’s Office, told Bloomberg. “This settlement helps compensate investors for their losses.”
The Financial Times noted in its coverage of the news that the claims could have potentially reached as much as $2.5 billion.
The London-listed group, however, noted it yesterday’s statement that the settlement did not resolve other securities-related litigation in connection with the Gulf of Mexico oil spill. The Wall Street Journal noted that a separate class action was pending in New Orleans federal court.
BP has already agreed to pay billions of dollars to settle both civil and criminal issues with the US authorities over the Deepwater Horizon disaster which killed 11 workers and triggered the worst offshore oil spill in US history.
As of 09:48 BST, Friday, 03 June, BP plc share price is 361.65p.