BP shares jump after activist investor reportedly buys stake
The reported stake-buying by Elliott has fuelled speculation over strategy changes at the oil giant and an overhaul of its management.
BP has seen its shares surge higher after an activist investor reportedly built up a stake in the oil giant.
Shares in the FTSE 100 firm jumped more than 8% at one stage in Monday morning trading, hitting their highest level for six months, following weekend reports that US firm Elliott Investment Management had snapped up a stake.
It comes after BP’s shares have languished recently, down almost 10% in the past year.
The reported stake-buying by Elliott has fuelled speculation over strategy changes at the group and an overhaul of the board.
BP is set to report results on Tuesday and unveil a strategy update at the end of February.
The size of the stake Elliott has bought is not known.
Both Elliott and BP declined to comment.
Kathleen Brooks, research director at XTB, said: “We don’t know how big its stake is, or exactly what its plans are for BP – will it try to break the company up, or could it try to force a sale of the company?
“We do not think that Elliott has enough of a stake in BP yet to force a sale of the company; however, if there was a firm offer on the table for BP in the coming weeks, then the stock price could take off.”
BP delayed its strategy update until Feb 26 to allow chief executive Murray Auchincloss to recover after a planned medical procedure.
It will be watched even more closely, given Elliott’s attention, with industry experts forecasting a further move away from renewable energy, which had been pursued by Mr Auchincloss’s predecessor.
Mr Auchincloss was appointed to the top role in January last year, having been acting chief executive since September 2023 following the surprise resignation of Bernard Looney after BP’s former boss failed to disclose his past relationships with company colleagues.
Neil Wilson, an analyst at TipRanks, said: “The firm is sure to face pressure to make substantial changes, from an overhaul of its green bets to a shake-up of the board.
“Specifically in terms of personnel, it is thought that the activist will push for removal of chairman, Helge Lund, who helped oversee the company’s controversial net zero strategy with previous chief executive Bernard Looney.
“Investors have been left unhappy since Looney made a dodgy bet in 2020 that global oil demand had peaked, driving the company towards a low-carbon strategy that has failed to pay off. Since then, shares have lagged peers significantly.”
Mr Wilson said that Elliott may also “press for divestment of clean energy business segments”, as part of a renewed switch back towards traditional oil and gas.
Mr Auchincloss has already spun off BP’s offshore wind business in a joint venture, while he is also looking to offload its onshore wind arm.
Tuesday’s results are expected to show a tough year for BP amid weak oil prices and lower global demand.
Most analysts are expecting fourth quarter earnings on an underlying replacement cost profit basis to fall to the lowest level since the fourth quarter of 2020, at 1.26 billion US dollars (£1.01 billion).
This would be down from 2.27 billion US dollars (£1.83 billion) in the third quarter and 2.99 billion US dollars (£2.41 billion) in the same three-month period a year ago.
For the full year, BP is set to see underlying replacement cost profits drop by 37% to nine billion US dollars (£7.25 billion), down from 13.84 billion US dollars (£11.15 billion) in 2023.
The group has been slashing costs in the face of tougher trading, recently announcing it will cut 4,700 jobs across its global workforce and 3,000 contractor roles.
The company did not disclose how many people were affected per country, but the reductions amount to just over 5% of its 90,000 worldwide employees.
