By Anousha Sakoui and Arunima Kumar
(Reuters) -Activist investor Elliott Management has built a near 5% stake in BP and is pushing the oil company to take radical action to transform its performance, including a big divestment programme, a source familiar with the matter told Reuters on Thursday.
Elliott is engaging with the company in advance of its Capital Markets Day, scheduled for February 26, which it sees as a critical event, the person said.
Some businesses under consideration to be divested are in the low-carbon sector, the person said.
The source said Elliott was not asking for a specific increase in BP’s oil and gas investments.
Elliott also backs BP’s independent strategy and did not propose a merger, according to the source.
BP said that it will be laying out a fundamental reset of its strategy on February 26. A BP spokesperson declined to comment further.
Elliott’s move on BP has boosted its shares, signalling that investors are optimistic that the activist might press for changes that deliver returns.
BP CEO Murray Auchincloss is on a mission to revitalise the company and boost profits but since taking on the job last year he has faced an uphill battle to reverse the company’s underperformance.
On Tuesday he pledged to fundamentally reset the company’s strategy as it reported a 35% fall in annual profits, missing analysts’ expectations.
Elliott started investing in BP last year, the person said.
The activist investor is not asking the British oil major to move its listing to the U.S., the source said, adding that rival Shell has been delivering in the UK and outperforming.
With a market value of about 75 billion pounds ($93.86 billion), based on LSEG data, BP is currently worth less than half of Shell.
Elliott’s campaign is being led by Gaurav Toshniwal and John Pike, the person said.
They both have experience in energy investments. Pike is also currently running Elliott’s U.S. refiner Phillips 66 campaign and was involved in the campaign against oil company Hess in 2017.
Financial Times first reported that Elliott had built a BP stake of about 3.8 billion pounds, making it the oil company’s third-largest shareholder.
BlackRock and Vanguard hold larger stakes in the energy major, at 9% and 5% respectively, the FT report said.
Elliott Management, which has about $70 billion in assets, is due to publish a regulatory filing in the U.S. on Friday to disclose its quarterly positions in listed companies.
($1 = 0.7991 pounds)
(Reporting by Arunima Kumar and Yamini Kalia in Bengaluru; Editing by Devika Syamnath and Jane Merriman)
