By Tsvetana Paraskova of OilPrice.com
Elliott Management is pushing for major asset sales at BP to address the undervalued shares of the UK-based supermajor after the U.S. activist investor built a stake of nearly 5% worth about $4.75 billion (3.8 billion British pounds), the Financial Times reported on Thursday, quoting sources familiar with the matter.
News of Elliott’s recently-built stake in BP, which now makes it the third-largest shareholder, broke this weekend, pushing BP’s shares soaring on Monday.
On Tuesday, BP’s stock fell as the company reported earnings below expectations. The fourth-quarter profit missed the analyst consensus estimate and was the lowest quarterly profit since the fourth quarter of 2020 when the pandemic was hitting global oil demand. BP attributed the lower earnings to weaker realized refining margins, as well as higher impact from turnaround activity, seasonally lower customer volumes, and fuel margins.
In the Q4 earnings release, BP also teased a fundamental reset of strategy as it seeks to push up its stock performance and regain investor trust.
“Building on the actions taken in the past 12 months, we now plan to fundamentally reset our strategy and drive further improvements in performance, all in service of growing cash flow and returns,” BP’s chief executive Murray Auchincloss said in a statement.
BP’s leadership will communicate its new strategy, which “will be a new direction for bp”, at a Capital Markets Update on February 26, Auchincloss added.
Analysts and investors expect even more cuts to the low-carbon business and a pledge to boost oil and gas production at the capital markets day later this month.
The pressure became more intense after reports emerged that Elliott Management had bought a stake in BP and would be pushing for changes in strategy, or even for board reshuffles.
This week, Elliott took aim at another large oil company—it demands changes at U.S. refiner Phillips 66 after amassing a $2.5 billion stake.
