- US hedge fund believes pivot away from green energy doesn’t go far enough
US hedge fund Elliott is demanding BP sell off its petrol stations as it embarks on an aggressive campaign to improve the performance of the oil giant.
The BP board is braced for a string of hardline demands from Elliott Management, an ‘activist’ investor that has taken a stake in the UK stalwart.
Activists buy shares in firms they believe are underperforming and agitate for change.
Elliott, which is renowned as one of the most ruthless of the breed, is dissatisfied with the strategy laid out by BP chief executive Murray Auchincloss less than a fortnight ago.
It believes a pivot away from ‘woke’ green energy projects and £10 billion of extra investment in oil and gas does not go far enough.
Selling off BP’s network of more than 1,200 petrol stations could haul in £31 billion, analysts estimate. The proceeds could be used to pay down debt.
Under pressure: Elliott is dissatisfied with the strategy laid out by BP chief executive Murray Auchincloss (pictured) less than a fortnight ago
Potential suitors include the EG Group, run by the billionaire Issa brothers, and Motor Fuel Group, owned by private equity firm Clayton Dubilier & Rice.
One investor said: ‘Murray and his team have to show they can unlock some value. BP is not the best owner for the petrol station business, which could achieve a far higher valuation elsewhere.’
Elliott, whose stake is worth £3.5 billion, is now preparing a battle plan that is likely to include trying to oust the chairman Helge Lund as well as splitting up large parts of the group.
The firm’s modus operandi usually involves a stinging letter criticising the chief executive and calling for sweeping changes.
A letter has yet to arrive but investors expect one before the company’s annual meeting in mid-April.
A source close to BP said: ‘I have dealt with activists before, but Elliott is on another level.’
Observers expect Lund, who has been in post for seven years, to be one of the first targets at the meeting.
He backed the green plans of both Auchincloss and his disgraced predecessor Bernard Looney before they were ditched.
A vote of more than 20 per cent is likely to be enough to make Lund’s position untenable.
A bright spot for management is likely to be the sale of Castrol with a price tag of up to £8 billion.
Saudi Aramco, whose pockets may be deep enough to deter other bidders, has emerged as the frontrunner for the lubricants business.
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