BP shares are at their highest level since August following Elliott's stake increase

In early trading on Monday, shares of oil giant BP rose 7%, reaching their highest level since August, following reports that activist investor Elliott Management acquired a stake in the firm, citing a reliable source.

By 823 GMT the shares had risen 7.3% to 464.75pence, their largest daily gain since Febuary 2023.

Shell shares dropped by nearly 4% and ExxonMobil rose 8%.

Biraj Borkhataria, an analyst at RBC Capital Markets, said: "Given BP’s underperformance compared to peers...we believe any activist would demand a change of chairperson at least."

Murray Auchincloss, BP's CEO, has tried to restore investor faith in the company strategy since his predecessor Bernard Looney resigned in September 2023 due to failing to disclose employee relationships.

Bloomberg News, which reported on the matter earlier Saturday, said that Elliott, a U.S. company, is trying to increase shareholder value by urging BP's management to take transformative measures. Elliott's stake was described as "significant".

BP and Elliott declined to comment.

Borkhataria stated that "in terms of strategic business review, we would expect a move to effectively divide up the core oil-and-gas segment into some of BP’s transition growth engines in order to minimise capital investment in these areas." (Reporting and editing by Amanda Cooper, Barbara Lewis and Arunima Kumru)

(source: Reuters)