BP Plc shares surged the most since 2020 after activist investor Elliott Investment Management, led by Paul Singer, acquired a significant stake in the British energy giant. The fund’s efforts have previously led to strategy shifts, CEO departures, and even corporate breakups at other big public companies.
Elliott is seeking to boost shareholder value by pushing BP to consider transformative measures, including refocusing on traditional oil and gas, monetizing assets for higher multiples, maximizing free cash flow generation, and increasing divestments. The activist investor believes the company is significantly undervalued and its performance is disappointing.
BP’s current CEO, Murray Auchincloss, has been struggling to turn around the company since his appointment in January 2024. Despite efforts to reshape the company internally, analysts and investors see a narrow window for resetting the direction of the company coming to a close.
Elliott’s intervention comes after BP stumbled through a series of missteps over the past 15 years, including the Deepwater Horizon disaster and former CEO Bernard Looney’s sudden dismissal. The fund’s track record suggests that it will not hesitate in applying pressure on Auchincloss to push for significant change.
BP reports fourth-quarter financial results next week, which may be an opportunity for Elliott to apply leverage. Analysts predict that a strategy update scheduled for this month will be crucial in determining the direction of the company. The activist investor’s intentions remain unclear, but it is clear that BP’s underperformance has caught the attention of influential investors.
BP’s shares rose as much as 8.2% on Saturday, and analysts predict further gains if Elliott’s demands are met.
Source: https://finance.yahoo.com/news/bp-faces-pivotal-moment-activist-210000056.html