BP shares surged on Monday, rising nearly 7% in early trading, after reports emerged that activist hedge fund Elliott Investment Management had acquired a stake in the British oil giant.
The size of Elliott’s holding has not been disclosed, but its involvement is already fuelling speculation about potential changes to BP’s strategy and leadership.
The stock climbed to 462p from its Friday close of 433.25p, marking a significant rebound from its November low of 367p.
Before Monday’s rise, BP shares had fallen nearly 10% over the past year, lagging behind rivals such as Shell, which remained largely unchanged in trading.
Elliott’s move could result in a major shake-up at BP
Analysts believe Elliott’s move could result in a major shake-up at BP, including potential changes to its board and strategy.
RBC Capital Markets analyst Biraj Borkhataria suggested that “any activist would call for a change in the chairperson at the very least.”
BP has been chaired by Helge Lund since 2019, and the company recently postponed an investor day to February 26, citing CEO Murray Auchincloss’ recovery from a medical procedure.
The event is expected to be crucial as Auchincloss lays out his vision for BP’s future, amid growing investor concerns over the company’s direction.
Jefferies analysts believe Elliott could push for BP to scale back its investments in low-carbon assets and exit certain retail markets.
Instead, the hedge fund is likely to advocate for a renewed focus on upstream oil and gas projects to maximize cash flow generation.
BP stock’s underperformance fuels calls for transformation
BP has struggled to keep pace with its peers.
Over the past five years, its stock has declined nearly 8%, while rivals such as Shell and TotalEnergies have gained about 30%.
Investors have grown increasingly frustrated with BP’s strategic direction, particularly as it pivots toward renewable energy and away from traditional fossil fuels.
Last month, BP issued a trading update warning of higher corporate costs, lower refining margins, and one-off charges linked to its bio-ethanol acquisition.
The company is also looking to sell its German refinery assets and recently announced plans to cut 4,700 jobs as part of a broader effort to achieve $2 billion in cash savings by 2026.
Elliott is expected to advocate for what it calls “transformative measures” to unlock shareholder value, according to sources familiar with the matter, Bloomberg reported.
The hedge fund has a long history of pushing for significant corporate changes, including strategy shifts, executive departures, and even company breakups.
A critical moment for BP’s leadership
BP’s leadership has faced a series of challenges over the years, from the Deepwater Horizon disaster in 2010 to the sudden departure of former CEO Bernard Looney last year over personal conduct issues.
The company’s latest struggles have raised questions about whether its current management can deliver the returns investors expect.
Auchincloss is under increasing pressure to prove that BP’s current strategy can deliver sustainable growth.
The upcoming investor day on February 26 will be a key moment for the CEO to outline how he plans to address concerns about BP’s direction and underperformance.
With Elliott now involved, investors will be watching closely to see whether BP takes a more aggressive approach to restructuring or faces increased pressure to make leadership changes.
As the situation develops, BP’s future strategy could be shaped as much by its activist investors as by its executives.
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