Bloomberg -- Activist Elliott Said to Build Stake in Struggling Oil Major BP ...................
Bloomberg
February 8, 2025
Activist Elliott Said to Build Stake in Struggling Oil Major BP- Elliott seeks to boost shares through transformative measures
- Activist fund sees £69 billion British oil firm as undervalued
BP Plc has fallen about 8% over the past five years.
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By Dinesh Nair, Aaron Kirchfeld, Swetha Gopinath, and Mitchell Ferman
Elliott Investment Management has built a significant stake in BP Plc, according to people familiar with the matter, as the British oil major struggles to win back investor confidence and reverse years of underperformance.
The activist fund is seeking to boost shareholder value by pushing the company to consider transformative measures, the people said, asking not to be identified because the discussions are private. Elliott believes BP is significantly undervalued and its performance is disappointing, they said. The exact size of the stake couldn’t be immediately learned.
Representatives for Elliott and BP declined to comment.
BP has fallen about 8% over the past five years, while its Big Oil rivals from Shell Plc to Exxon Mobil Corp have risen by at least 30%. The company under former Chief Executive Officer Bernard Looney embraced net-zero in a failed bet that oil consumption had peaked, and has since struggled to present a clear strategy for a turnaround.
With a market value of about £69 billion ($86 billion), BP is worth less than half of Shell today.
CEO Murray Auchincloss, an insider who stepped into the role after Looney was dismissed over his personal conduct, is widely expected to outline a clearer shift back toward oil and gas when he presents a much-anticipated strategy update on Feb. 26. However, investors have been growing impatient, including after BP warned in October that its share buybacks could slow this year.
BP is scheduled to report fourth-quarter financial results on Tuesday, and has already flagged broad weakness across its business for the period. While its biggest rivals also reported lower earnings in the last three months of the year, analysts view those companies as having a clearer direction and stronger balance sheets.
Elliott’s move is the latest in a series of high-profile activists taking on Big Oil. Exxon lost an battle to ESG-leaning Engine No. 1 in 2021, while Dan Loeb’s Third Point LLC took a stake in Shell in the same year, calling for the company to break off its liquefied natural gas, renewables and marketing divisions into a standalone business.
Elliott has in recent months successfully pushed for a breakup at Honeywell International Inc., which announced this week it would split into separate publicly traded companies. The fund also disclosed a stake in Anglo American Plc last year during BHP Group’s attempt to acquire the London-based miner.
It also has a long history of taking stakes and pushing for changes at energy companies, including campaigns at NRG Energy Inc. and Canadian oil producer Suncor Energy Inc. in recent years.
BP stock is held by a wide range of institutional investors. The company’s prolonged underperformance has prompted some commentators to suggest that its best option could be to find a buyer, pointing in particular to Shell, which could reap significant costs savings and growth in the US and create a British-Dutch champion, or other rivals such as ConocoPhillips or TotalEnergies SE.
Auchincloss announced last month the company would cut about 5% of its workforce to reduce expenses, and was planning further cost-cutting efforts over this year. The company has stopped or paused 30 projects since last June to focus on the ones that make the most money.
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