Brough: 'World has gone mad on BP'; Dividend is safe

Schroders' Andy Brough has dismissed concerns BP has become a takeover target or will be forced to cut its dividend, labelling investor reaction to the Gulf of Mexico disaster as "mad".

Brough, manager of the £1.71bn Schroder UK Mid 250 fund, believes the $75bn wiped off the market value of BP in the last few weeks has been an overreaction, especially considering costs up to this point are only $1bn. "The world has gone mad on BP," Brough told Bloomberg. "Under the 1990 Oil Protection Act, you have to split the cost whoever is involved. There are three people on this rig; BP's share is 65%. Let's say they cannot fix it for the next 120 days, and that runs at $60m a day, that comes to $7.2bn. "Let's just say BP had to pay a $25bn fine. Gearing goes from 20% to 30%,...