The prime minister’s informal strategy of reportedly telling the oil company any takeover deal would be resisted is a cop-out
David Cameron doesn’t want BP to be sold. Indeed, as the FT reports, Downing Street has told the oil company privately that any takeover deal would be resisted. Since the government lacks powers to intervene, it’s unclear what it would actually do if ExxonMobil, say, had a pop at a price that made BP shareholders salivate. At a push, the government could try to erect a few obstacles in a hurry, as it did when Pfizer bid for AstraZeneca in 2014, and hope the bidder goes away. But that’s about it.
Such an informal, muddy-the-waters, strategy is a cop-out. There are only two coherent positions to hold on major takeovers, especially takeovers from overseas. The first is an open-doors approach, in which shareholders are left to decide when there are no competition objections. Such a laissez-faire view is supposed to be the UK’s current policy, with the exceptions of defence (on grounds of security) and media (plurality). The second position is the opposite: adopt a public interest test for major bids and describe, roughly, how it would be applied.