BP’s dance with Elliott

Two big job moves to start: Kroger and Albertsons, the two biggest US supermarket chains, separately announced the departures of their chief executives months after the collapse of their $25bn merger.

And another thing: Rothschild & Co has hired the former Moelis investment banker who quit last year after a viral video showed him punching a person in the face during a New York City Pride event.

In today’s newsletter:

Oil major BP’s dance with Elliott

The British oil major BP has gradually pivoted away from the “oil” part of its business in recent years.

More than two decades ago, BP, once known as British Petroleum, rebranded itself as “Beyond Petroleum”, a largely symbolic move to highlight its commitment to sustainability.

Then it drew up plans to become a renewable energy powerhouse riding a wave of investor interest in lower-carbon energy production.

Yet within a few weeks of activist investor Elliott Management showing up on the company’s doorstep in February, BP has largely unwound its decades-long green pivot.

Last week at its investor day, BP chief executive Murray Auchincloss said he would overhaul its strategy, slash plans to become a major renewable energy player, and cut spending on green energy by 70 per cent.

Now he’s making even deeper changes to prove he means it. BP is rejigging its board of directors, reports the FT, expanding 11 to 13 members with the two new members focused specifically on oil and gas.

But it’s unclear if Auchincloss’s gambit will satisfy Elliott — or other shareholders, for that matter. BP’s stock barely nudged after Auchincloss said that he wanted to double its market capitalisation by 2030 by focusing on oil and gas, signalling investors were unmoved.

While no one on BP’s board is getting the axe, the new hires could be interpreted as an attempt by the company’s chair Helge Lund to show Elliott that it’s taking action.

Further changes loom in the air, however.

A person familiar with Elliott’s thinking previously said BP’s plans didn’t go far enough. The activist investor wants big divestments as part of cuts in spending on renewables.

One top-30 shareholder added it was “problematic” that both chief executive and chair remain in charge despite the “complete turnaround” at BP.

Auchinloss refutes that: “We’ve laid out a very aggressive plan and we now need to be held to account to deliver it, and we will be held to account to deliver it.”

Elliott hasn’t yet made any formal calls for changes to BP’s board and has held its cards relatively close to its chest despite becoming one of the company’s largest shareholders.

Followers of the drama expect Elliott will hold accountable the BP board members and executives most associated with its 2020 strategy to slash oil and gas output by 40 per cent by the end of the decade.

“Elliot will be wanting heads,” said one energy executive familiar with one of its past campaigns, adding that the hedge fund is likely to have already identified potential board members to put forward.

Prada gears up for a shopping spree

What does Italian fashion house Prada see in Versace?

The Milan-based label is on the block, and its bold colour-palette and overt branding stands in contrast to its larger and more conservative fashion rival.

This is the question buzzing in fashion circles at a time when Prada has emerged as the frontrunner to buy Versace from Capri Holdings for about €1.5bn, a deal that would put two of Italy’s best-known luxury fashion brands under one roof.

In the world of high fashion, there are three luxury groups that dominate: LVMH, Kering and Richemont. Together, they own some of the biggest brands in luxury goods including Cartier, Louis Vuitton and Saint Laurent.

Prada, it seems, would like to offer an Italian counterpoint to the French and Swiss oligopoly that sets the tone for the industry. Acquisitions, particularly well-timed strikes for brands in need of repair, are the lifeblood of such fashion empires.

Capri, which also owns Michael Kors and Jimmy Choo, had hoped to fetch a lot more for the company. Its initial asking price was €3bn.

It underscores that Prada, under namesake design chief Miuccia Prada and her co-designer Raf Simons, may be willing to take some new intellectual and financial gambles, spotting an opportunity.

During booms in the fashion industry, when more was more (Exhibit A: Gucci under Alessandro Michele), and pullbacks, when labels stripped back in pursuit of a quiet luxury, Prada plodded along in its own direction.

Miuccia Prada and Simons have seemed more interested in a conservative and cerebral approach that has won the brand consistent acclaim and a growing buyer base, even as sales at other high fashion labels decelerated.

Now deal talks have even begun to spill out on to the runway. Miuccia Prada said last week at the group’s fashion show in Milan that “everyone is looking” at Versace.

It’s unclear how Prada envisions pulling off a turnaround of Versace. But the deal, said to be coming “within weeks”, will help to reveal the Italian fashion house’s strategy in creating a “big four” of high fashion.

7-Eleven’s management buyout dreams fade

When Seven & i Holdings received an unsolicited takeover offer from Canada’s Alimentation Couche-Tard last year, the Japanese group scrambled to find an alternative.

The initial $39bn proposal was easy to ignore, but a later one for $47bn was harder to.

The parent company of 7-Eleven quickly brainstormed different routes to keep its independence, proposing in October to separate non-core supermarkets and speciality stores.

The founding Ito family was also determined to keep the company away from a foreign buyer.

In November, they hatched a plan to buy the company. The family put a proposition together to buy the group for $58bn — a lucrative and promising alternative to Couche-Tard’s offer.

But last week, the bid unravelled.

Seven & i said on Thursday it had received word that the family was no longer able to make a formal proposal to acquire the company. The statement came after Itochu, owner of rival convenience store chain FamilyMart, decided it would not join a buyout.

The Ito family had sounded out big Japanese banks, international private equity groups and other global institutions, including Apollo Global Management and Thailand’s CP Group. But they weren’t able to ultimately clinch the needed financing.

Seven & i’s shares plunged more than 10 per cent in Tokyo after the announcement, rattling the company and raising the likelihood that Couche-Tard might succeed after all. At that scale, there simply aren’t many potential buyers.

And at the same time, Seven & i is undergoing an internal overhaul.

Ryuichi Isaka is set to depart as chief executive and be replaced by Stephen Dacus, an independent director who has been leading the special committee tasked with evaluating Alimentation Couche-Tard’s approach.

What Dacus proposes next for Seven & i stands to be a historic moment not only for the convenience chain owner, but also for corporate Japan.

Job moves 

• Sachin Dev Duggal, the founder of one of the UK’s best-funded tech start-ups Builder.ai, has stepped down as its chief executive, capping a rollercoaster tenure running a company backed by Microsoft and SoftBank.

• Julius Baer has named former HSBC chief executive Noel Quinn as its next chair, as the Swiss bank and wealth manager embarks on a cost-cutting drive and aims to recover from a crisis triggered by its exposure to failed property group Signa.

• KPMG US has named Tim Walsh as the firm’s next chair and chief executive, with Atif Zaim as deputy chair. They succeed Paul Knopp and Laura Newinski, respectively.

• Weil Gotshal has hired Frances Dales as a partner for the US private equity group in Los Angeles. She joins from Kirkland & Ellis.

• Lazard has appointed Peter Harrison to the bank’s board of directors. He was most recently chief executive of Schroders.

Smart reads

Trump-fuelled comeback Gautam Adani is plotting significant new investments in the US, the FT reports. It underscores how quickly the fortunes have changed for India’s second-richest man.

Going public Private equity and venture capital investors have good reason to eye the markets this year, Lex writes. But they need a new IPO playbook.

A big bubble The US has grown to nearly two-thirds of global equity market value, a staggering figure with little historical precedent. But some analysts see danger in a “huge bet on AI”, reports the FT.

News round-up

Peter Thiel-backed fintech Ramp nearly doubles valuation to $13bn (FT)

Troubled Wood Group taps Rothschild for refinancing talks (FT)

Bayer’s turnaround man faces ‘crucial’ 12 months at ailing conglomerate (FT)

TSMC unveils $100bn advanced chipmaking investment in the US (FT)

BAE chief in line for bonus boost under ‘golden handcuffs’ pay deal (FT)

Ex-Barclays CEO Jes Staley argues bank had ‘clear understanding’ of his Epstein ties (FT)

China’s $1 bubble tea chain soars 43% in Hong Kong debut (FT)

Guggenheim and Legendary billionaires create $40bn pot to make AI bets (FT)

Singapore probes suspected fraud in sales of US-controlled Nvidia chips (FT)

Deutsche Bank clashed with ECB over bad loan losses (FT)

Clearlake to buy majority stake in ModMed that values it at $5.3bn (FT)