Buying Woodside shares? Here’s why everyone’s talking about the Exxon takeover

Woodside Energy Group Ltd (ASX: WDS) shares are edging lower today.

Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed Friday trading for $31.23. In early morning trade on Monday, shares are changing hands for $31.19 apiece, down 0.1%.

For some context, the S&P/ASX 200 Index (ASX: XJO) is up 1.3% at this same time, while the S&P/ASX 200 Energy Index (ASX: XEJ) is down 1.4%.

ASX energy stocks, in general, are underperforming today following news that a peace deal has been reached to end the Middle East conflict.

With traders betting oil will again begin to flow through the critical Strait of Hormuz, the Brent crude oil price is down 4.2% to US$83.68 per barrel. Notably, that’s down 24% from the US$110 per barrel oil was trading for a month ago.

But Woodside shares appear to be outperforming today amid ongoing rumours that Exxon Mobil Corp (NYSE: XOM) is considering the Aussie oil and gas giant as a potential takeover target.

Here’s what we know.

Woodside shares in takeover crosshairs

On Friday US time, Bloomberg reported that “people with knowledge of the matter”, who wished to remain anonymous, had named Woodside among the potential acquisition targets that Exxon is considering.

Exxon was said to be holding early-stage internal discussions on the potential to acquire Woodside. The anonymous sources said there was no certainty that the discussions would lead to a firm takeover bid.

Woodside shares, which also trade on the New York Stock Exchange, closed up 6.2% on Friday on the NYSE, as the acquisition speculations hit the wires.

Woodside has a history of collaboration with Exxon. The two global energy companies operate a joint venture in the Gippsland Basin, located offshore Victoria.

Last July Woodside agreed to assume operatorship of those JV Bass Strait assets, with the ASX 200 energy stock set to take over as operator later this year. The two companies’ equity interests in the assets remain unchanged.

In an ASX release this morning, Woodside stated:

In response to recent media speculation, Woodside is not aware of any proposal and confirms it is not in discussions regarding a potential transaction with Exxon Mobil Corporation.

What are the experts saying about Exxon’s takeover?

While acquiring all of Woodside’s shares would add some valuable, diversified energy assets to Exxon’s portfolio, MST Marquee energy analyst Saul Kavonic believes a successful deal is unlikely to materialise.

According to Kavonic (quoted by The Australian Financial Review):

Woodside is being pitched as currently more vulnerable to a takeover given a new CEO without much experience in publicly listed M&A and a chairman with challenged credibility in investors’ eyes who is approaching the end of a protracted tenure.

But it would be erroneous for potential bidders to see Woodside’s current leadership weakness as an opportunity.

To be successful, any bidder for Woodside would need the support of a strong Woodside board and management in order to secure Australian government approvals, especially in the wake of the global fuel crisis.

Kavonic added that, as a foreign business, Exxon would also be required to get the green light from Canberra for the acquisition to go through, which he believes would be a hard sell.

“Gaining government approval for any such deal would be challenging, especially in wake of the fuel crisis, given Exxon’s reputation with the government for being tough to deal with,” he said.

With today’s intraday dip factored in, Woodside shares are up 31.8% in 2026, not including dividends.

The post Buying Woodside shares? Here’s why everyone’s talking about the Exxon takeover appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.