BP shares surge after activist Elliott builds stake
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More news: Shares in BP jumped the most since 2020 following news that Elliott Investment Management has taken a large stake in the oil major. Shares surged almost 7% to 462p during early UK trading on Monday, after closing at 433.25p on Friday.
While the size of the activist investor’s stake is not known, Elliott’s involvement is likely to drive speculation that a strategy overhaul and board shake-up could be on the cards for the beleaguered oil giant.
Elliott builds stake in struggling BP, reports say
The news: Activist investor Elliott Investment Management has taken a significant stake in BP, targeting the struggling oil giant amid investor frustration over its lagging stock performance, Bloomberg reported citing unnamed sources.
Elliott sees BP as undervalued and is pushing for transformative changes to boost shareholder value, the sources said.
BP could be pushed to refocus on its core oil and gas business after years of building up a sprawling empire of green energy projects, the Financial Times noted.
One BP investor told the FT Elliott could also call for a full break-up or for BP to relist in the US.
The numbers: The exact size of its Elliott stake is not known.
BP’s shares have dropped almost 8% over five years, while those of rival Shell have gained 32%. Exxon Mobil shares are up 77% over the same period.
The context: BP’s underperformance has fuelled speculation of takeover interest or activist intervention at the £68 billion ($134 billion) oil giant.
The aggressive activist has a history of targeting energy firms, with previous targets including Anglo American, NRG Energy and Suncor Energy. In its last public campaign, Elliott successfully pushed for Honeywell’s breakup.
BP reports quarterly results this Tuesday, 11 February, and Murray Auchincloss, BP’s CEO since September 2023, will also be under pressure to clarify the company's future when he delivers a strategy update on 26 February.
What they said: One US activist that had recently considered a move told the Financial Times BP’s board had been “asleep at the wheel” and had a “muddled strategy”. It added: “BP’s upstream business on its own justifies its entire market value.”
BP and Elliott declined to comment to Bloomberg.
The sources: Bloomberg, Financial Times
