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| BP shares jump 6% on takeover reports | BP shares jump 6% on takeover reports |
| (about 4 hours later) | |
| BP shares have surged almost 6% after reports that rival Royal Dutch Shell considered a takeover bid following the Gulf of Mexico oil spill. | BP shares have surged almost 6% after reports that rival Royal Dutch Shell considered a takeover bid following the Gulf of Mexico oil spill. |
| Speculation that BP may not need to tap all of its $20bn (£13bn) compensation fund also helped to push the company's shares up by 27 pence to 493p. | Speculation that BP may not need to tap all of its $20bn (£13bn) compensation fund also helped to push the company's shares up by 27 pence to 493p. |
| The Daily Mail newspaper reported that Shell mulled a bid for BP when its shares slumped because of the spill. | The Daily Mail newspaper reported that Shell mulled a bid for BP when its shares slumped because of the spill. |
| The share price rise comes despite a sharp fall in the price of oil. | |
| US light crude fell by $2.17, or 2.4%, to $89.38 a barrel in Tuesday trading, while London Brent dropped by $1.55, or 1.6%, to $923.29 a barrel. | |
| Oil prices have hit two-year highs in recent days, partly because of increased demand due to the cold weather in the US and Europe and continuing optimism about the global recovery. | Oil prices have hit two-year highs in recent days, partly because of increased demand due to the cold weather in the US and Europe and continuing optimism about the global recovery. |
| Dividend return | Dividend return |
| The Mail reported that Shell decided against a bid for BP as it was unwilling to risk taking responsibility for the potentially unlimited liabilities from the spill. | The Mail reported that Shell decided against a bid for BP as it was unwilling to risk taking responsibility for the potentially unlimited liabilities from the spill. |
| However, Shell management did agree to bid for BP if another oil giant, such as the US's Exxon Mobil, launched a takeover attempt, the report said. | However, Shell management did agree to bid for BP if another oil giant, such as the US's Exxon Mobil, launched a takeover attempt, the report said. |
| Reports also suggest that Kenneth Feinberg, the US lawyer responsible for BP's compensation fund, suggested that $10bn might be enough to pay the victims of the spill. | Reports also suggest that Kenneth Feinberg, the US lawyer responsible for BP's compensation fund, suggested that $10bn might be enough to pay the victims of the spill. |
| "These reports may give investors reason to believe that a dividend could be brought back sooner rather than later, and that could have quite a positive impact on the share price," said David Hart at Westhouse Securities. | "These reports may give investors reason to believe that a dividend could be brought back sooner rather than later, and that could have quite a positive impact on the share price," said David Hart at Westhouse Securities. |
| BP was forced to suspend dividend payments last year following pressure from the US government. | BP was forced to suspend dividend payments last year following pressure from the US government. |
| The Deepwater Horizon drilling rig explosion in the Gulf in April killed 11 workers and spilled millions of barrels of oil over several months. | The Deepwater Horizon drilling rig explosion in the Gulf in April killed 11 workers and spilled millions of barrels of oil over several months. |
| The oil leak became the worst environmental disaster in US history. | The oil leak became the worst environmental disaster in US history. |