BP Reportedly Mulls Castrol Lubricants Sale, But Retail’s Not Too Enthused
A Bloomberg report said the lubricants unit, whose products are sold under the Castrol brand, is also among the assets that Elliott has identified for potential disposals.
BP Plc (BP) stock garnered retail attention on Tuesday after Bloomberg News reported that the company is considering selling its lubricants business. Shares were up marginally in after-hours trading.
Bloomberg reported that the unit could be worth about $10 billion in a deal, citing a source.
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The report added that BP is considering selling the unit as one of many options to win back investor confidence.
Several media outlets reported last week that activist investor Elliott Investment Management has taken a nearly 5% stake in the British oil major.
Over the past few years, BP’s shares have lagged behind rivals such as Exxon, Chevron, and Shell. Under former CEO Bernard Looney, BP invested heavily in renewable energy instead of fossil fuel, based on a miscalculated bet that oil demand had already peaked by 2020.
The Bloomberg report said the lubricants unit, whose products are sold under the Castrol brand, is also among the assets that Elliott has identified for potential disposals.
The report said the company could announce the potential divestment during its capital markets day on Feb. 26. It added that deliberations on the possible sale are ongoing, and no final decisions have been made.
The Castrol brand is present in more than 150 countries, serving customers and consumers in the automotive, marine, industrial, aerospace, and energy production sectors.
BP CEO Murray Auchincloss is expected to unveil a new company strategy during its capital markets day.
Last week, DZ bank analysts wrote that the company's extensive restructuring will take a long time to become visible in profits, lower debt, and more sustainable dividends. The brokerage added that further setbacks in the future cannot be ruled out as well, according to TheFly.
Retail sentiment on Stocktwits moved down to ‘bullish’ (67/100) territory from ‘extremely bullish’(80/100) a day ago, while retail chatter remained ‘high.’
Over the past year, BP’s U.S. shares have fallen 0.7%.
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