The Beach Energy Ltd (ASX: BPT) share price failed to finish the day in the green on Tuesday. Disappointing shareholders, the oil and gas company slipped 1.9% lower during the session, finishing at $1.31 per share.
Negative sentiment was too strong among investors today after rumours that the company's largest shareholder, Seven Group Holdings Ltd (ASX: SVW), might be looking for an exit.
Let's dive deeper into the details.
Image source: Getty Images
Putting the Beach Energy share price under pressure
According to The Australian, there are whispers circulating that Seven Group could be looking to sell. At the time of writing, Seven Group holds roughly 30% of all Beach Energy shares on issue, making it its largest shareholder by far. In total, the stake has a value of $897 million based on the current Beach Energy share price.
Reportedly, the diversified investment group is chasing a buyer for its Beach holding following its takeover of construction materials manufacturer, Boral Limited (ASX: BLD). The rather messy process of climbing up to a 70% shareholding in Boral meant forking out $5.7 billion to get there.
While the merger and acquisition realm is hot at the moment, Seven Group might find it challenging to obtain a buyer of its Beach Energy stake. Sources say buyers of oil and gas assets are getting hard to come by as environmental, social, and governance (ESG) considerations become a higher priority.
Furthermore, if these rumours are true, it only adds to the volatility taking place in the Beach boardroom. Last week, the company experienced the departure of its managing director and CEO Matt Kay. In the meantime, chief financial officer Morné Engelbrecht has temporarily assumed the role.
While we can't draw a direct correlation between the Beach Energy share price and today's rumours, it is possible that it was a contributing factor towards the decline.
The Beach Energy share price is down more than 27% year-to-date.
