BP shares surge on Reuters report Elliott had built a stake in the company

Investing.com -- Activist investor Elliott Investment Management has acquired a stake in BP (NYSE:BP), Reuters reported over the weekend, citing a source familiar with the matter. Reuters said the size of the stake was not disclosed.

The report sent BP’s shares surging more than 7% in London trading Monday.

Elliott is pushing for changes at the British oil major to boost shareholder value, Bloomberg said in a separate report on Saturday, describing the investment as “significant.”

The activist investor believes BP is undervalued, with a market capitalization of approximately £69 billion ($85.62 billion), compared to Shell’s £161 billion valuation.

The oil giant has been taking steps to streamline its operations. Last week, the company announced plans to sell a refinery in Germany, as part of efforts to cut costs by at least $2 billion by the end of 2026.

BP CEO Murray Auchincloss has been working to regain investor confidence following the sudden departure of Bernard Looney in September 2023.

Under his leadership, BP announced in January that it would reduce its global workforce by more than 5%. Auchincloss is set to outline his strategic vision during an investor day on February 26.

The company recently warned that lower refining margins and planned maintenance would weigh on profits, potentially reducing earnings by up to $300 million quarter-on-quarter.

BP is scheduled to release its fourth-quarter and full-year financial results on February 11.

Elliott’s reported investment in BP adds to a growing trend of activist investors targeting major oil companies.

In 2021, Exxon (NYSE:XOM) was targeted by ESG-focused Engine No. 1 and lost the battle, while Dan Loeb’s Third Point took a position in Shell (LON:SHEL) and advocated for splitting off its liquefied natural gas (LNG), renewables, and marketing businesses into a separate entity.

In recent months, Elliott has successfully pushed for corporate breakups. The firm played a role in Honeywell International's (NASDAQ:HON) decision to separate into independent publicly traded companies, a move announced last week.

Last year, Elliott also revealed a stake in Anglo American PLC (LON:AAL) amid BHP Group's (NYSE:BHP) efforts to acquire the London-based miner.