Activist investor Elliott Investment Management is taking aim at Canadian oil producer Suncor
Energy (SU), pushing the company to add five new directors to its board and overhaul its
management team.
Elliott Management said it is targeting Suncor Energy to change a “slow-moving, overly
bureaucratic corporate culture.”
Elliott said the company should also look at selling its retail network of gasoline stations across
Canada to unlock a higher share price.
Suncor stock rose 12% to $47.22 in Toronto trading on news that it has been targeted by Elliott
Management, its highest level since October 2018.
The Calgary-based company is the worst-performing large oil producer in Canada since the
beginning of 2021. Analysts have said the stock is being weighed down by a series of
operational problems, including a fire that resulted in an injury at a refinery in March and fatal
accidents in the last two years.
Suncor also cut its production guidance at its Fort Hills oil sands mine in 2021 after finding
slopes in the mine were not stable.
Elliott Management, which owns a 3.4% stake in Suncor stock, could increase that stake or
partner with other shareholders to call a special meeting if the company resists change.
While Suncor stock has returned 107% since the beginning of last year, those gains have been
dwarfed by Canadian Natural Resources’ (CNQ) 172% gain in the same period. Cenovus
Energy (CVE) has returned more than 200% to shareholders.
