SEATTLE (Oil Monster): BP’S dramatic under-performance compared with other oil majors has reached a crunch point – a looming showdown with one of the world’s most aggressive activist investors.
Elliott Investment Management, led by Paul Singer, has built a significant stake in the British energy giant, typically the first step in a playbook it has deployed to successfully push for change at many other big public companies. Over the years, the fund’s efforts have led to strategy shifts, CEO departures and even corporate breakups.
The intervention comes after BP has stumbled through a series of missteps over the past 15 years, from the Deepwater Horizon disaster to former chief executive officer Bernard Looney’s sudden dismissal for his personal conduct.
Since Looney’s faulty bet in 2020 that global oil consumption had peaked and the world was accelerating towards net zero emissions, BP’s valuation has lagged peers. Several of those rivals have been running the numbers over what a takeover might look like, according to sources familiar with the matter. It’s not clear whether any are seriously considering a move, but that such deliberations are happening is an indicator of how far the London-based behemoth has fallen.
Over the past five years, BP shares have dropped almost 8 per cent, compared with a gain of about a third for its closest rivals Shell and TotalEnergies.
Elliott is seeking to boost shareholder value by pushing BP to consider transformative measures, according to sources familiar with the matter, who asked not to be identified because the discussions were private. It believes the company is significantly undervalued and its performance is disappointing, they said.
Courtesy: www.businesstimes.com.sg
