Galic1 wrote: Calls for Board Enhancement, along with Strategic and Management Review
Sees $30 Billion Value Creation Opportunity, a Potential Share-Price Increase of 50% or More
Full Letter and Presentation Available at RestoreSuncor.com
WEST PALM BEACH, Fla., April 28, 2022 /PRNewswire/ -- Elliott Investment Management L.P. ("Elliott"), which manages funds that have made an investment representing approximately a 3.4% economic interest in Suncor Energy Inc. (NYSE:SU) (the "Company" or "Suncor"),1 today sent a letter and presentation to the Board of Directors of Suncor. According to the letter, the purpose of the materials is to outline the right path forward to restore Suncor to its role as a leader of the Canadian energy industry.
Suncor has seen a decline in the exceptional performance that was formerly its hallmark, the letter said, which has led to, among other things, missed production goals, high costs, and safety failures. In particular, shareholders have seen their investment lag behind nearly all large-cap North American oil and gas companies, as Suncor's share price has remained virtually unchanged since early 2019, even as oil prices have climbed to their highest level in almost a decade.
To deliver improved results and restore the confidence that has been lost, Elliott believes the Company must pursue the critical steps detailed in its Restore Suncor plan, including:
- Board Enhancements: Add five new independent directors with deep expertise in the Canadian energy industry to refresh governance and oversee the necessary change.
- Management Review: An objective review of Suncor's executive leadership by the refreshed board will ensure the right management is in place to deliver excellence in operating and safety performance.
- Operations: Overhaul the Company's operational and safety culture, which is critical if Suncor is to regain its place as a top performer. Deliver on the long-promised $2 billion cash flow improvement plan.
- Enhanced Capital Return: Increase capital returns from 50% to 80%+ of discretionary cash flow after capex and dividends to provide Suncor's shareholders an industry leading annual cash return yield.
- Strategic Review: Explore opportunities to unlock the value of high-multiple assets outside of core Oil Sands business, including a strategic review of retail.
Through realizing the Company's full potential, Elliott believes that the Board can unlock more than $30 billion in value for shareholders, a potential increase of 50% or more from today. Elliott looks forward to engaging with the Board, along with fellow shareholders, as soon as possible.
The letter and presentation can be downloaded at RestoreSuncor.com.
The full text of the letter follows:
April 28, 2022
The Board of Directors
Suncor Energy Inc.
150 – 6 Avenue S.W.
Calgary, Alberta, Canada T2P 3E3