Shares in oil titan BP (BP) flowed higher today despite more activist calls to reshape its business – this time to pull the pump on its gas station arm.
According to U.K. media reports over the weekend U.S. activist investor Elliott Management, which has an around 5% stake in the company, wants BP to sell off its network of over 1,200 gas stations. This could be worth around $40 billion and be used, most likely, to pay down debt. As of December 2024, BP’s debt mountain stood at around $71 billion.
Latest Step in BP Shake-up
It would mark the latest step in Elliott’s strategy to shake-up BP’s operations and boost its value and share price. Over the last 12 months BP stock is down 7%.
The main focus of Elliott Management to date has been on getting BP to slash its spending on renewable energy projects. This led to BP recently announcing plans to scrap its goal of being a global renewable energy leader, reduce spending on green energy projects by 70% and sell $20 billion of assets.
Some investors, such as Elliott, want the company to go further in divesting renewable energy projects and even want the board that drove the green push to be weeded out themselves.
Stormy AGM Ahead
BP has again responded with reports last week that it was considering appointing two new board members – one focused only on oil and gas.
AJ Bell investment director Russ Mould said battle lines were being drawn at BP ahead of the company’s Annual General Meeting next month. It is expected that Elliott Management will call for the head of chair Helge Lund. “BP will be sitting uneasily in case it gets an aggressive letter from Elliott in the post ahead of the AGM. The meeting itself will be a test of the current management’s ability to resist outside pressure and pursue its own course,” Mould said.
Is BP a Good Stock to Buy Now?
On TipRanks BP has a Moderate Buy consensus based on 4 Buy, 6 Hold and 1 Sell rating. BP stock’s consensus price target is $34.65 implying an 7.08% upside.
