BP PLC (LSE:BP.) shares fell 1.9% to 429.3p, a six-week low, after reports that Shell PLC's (LSE:SHEL, NYSE:SHEL) mergers chief departed after CEO Wael Sawan blocked a bid for its FTSE rival.
A lack of enthusiasm for the deal from Sawan and finance chief Sinead Gorman suggests a deal is not likely to be pursued any time soon.
According to reports from the FT and Reuters, Greg Gut pushed for a potential deal with BP and chair Andrew Mackenzie was interested in exploring the idea.
However, Sawan and Gorman opposed the move, arguing that a takeover of such scale could disrupt Shell’s strategic priorities.
After a Wall Street Journal report that it had been in "early stage talks", Shell issued a statement saying it had "not been actively considering making an offer for BP".
Shell said it had not made an approach to BP, nor held talks about a possible offer and "has no intention of making an offer for BP".
The denial failed to stop the buzz of speculation in the City of London, which followed reports earlier in the year that Shell was running numbers on a potential combination, but was waiting for further stock declines, another suitor to make the first move, or for BP to reach out.
Following its statement on the matter, UK takeover rules bar Shell from pursuing BP for six months, a deadline that expires on December 26.