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Activist hedge fund Elliott Management has built a stake in a BP struggling with BP specializing in its BP, according to two people familiar with the matter.
It is impossible to learn the exact size of Elliott shares, but managing the $70 billion assets in the hedge fund has adjusted the activist strategy in recent years to increase the size of its personal bets while reducing its focus.
BP stock has fallen nearly 9% over the past year, while rival Shell shares have risen by 6.5%, with investors complaining about the company’s poor financial condition, high debt and lack of strategic clarity.
Over the past few weeks, speculation has been in the London market that BP is vulnerable to acquisitions or aggressive shareholders.
After years of empire of green energy projects, pressure from U.S. investors could push BP to refocus on its core oil and gas business.
One BP investor suggested that Elliott could call for a full breakup, or the company lay off employees from some of its weaker businesses and re-escalate in the U.S.
Funds from other activists have recently considered accumulating stake in BP, but the size of the £70 billion company has prevented them. An American activist considering the move said BP’s board “was asleep on the steering wheel” and adopted a “chaotic strategy.” It added: “BP’s upstream business itself justifies its overall market value.”
Both BP and Elliott declined to comment.
BP reported quarterly results on Tuesday and will update investors on February 26 regarding their midterm strategy.
The company’s CEO Murray Auchincloss postponed it after an undisclosed medical procedure and moved it from New York to London.
Elliott is led by Gordon Singer, son of the founder of the company. The company targets companies such as Anglo-US mining group, which is listed in the UK, and pharmaceutical giant SKM.
The company is known as a terrible radical investor who is willing to fight the board if it disagrees with the company’s strategic direction.
Earlier this week, UK Bank reported that Elliott listed nearly 5% of its stakeholder conglomerate Smith Group in the UK, which supports the company to sell or sell two of its four units.
The company won a major victory this week at U.S. group Honeywell as it announced plans to break up on Thursday, three of Elliott’s campaign to achieve the result Months.
Elliott’s stake in BP was first reported by Bloomberg.
Jamie Smyth’s other reports in New York
