By Sam Boughedda
Suncor Energy (NYSE:SU) announced Monday that it had reached an agreement with Elliott Investment Management to appoint three new independent directors, two of whom will serve on the CEO search committee and form a new committee to oversee a strategic review of Suncor's downstream retail business.
"These actions build on Suncor's ongoing efforts to enhance safety, reliability and operational excellence and to restore Suncor's industry leadership," Suncor said.
Suncor shares jumped following the announcement before giving up the majority of its initial gains, closing the session 1.4% higher.
Suncor said it will launch a strategic review of its downstream retail business in an attempt to unlock shareholder value. The review will "evaluate and consider a wide range of alternatives, from a potential sale of the business to options to enhance the value," Suncor said in a statement.
A committee of independent directors, headed up by Board director Russ Girling and including newly appointed directors, will oversee the review and make a recommendation to the Board.
The review is expected to be completed in the fourth quarter.
As part of the agreement with Elliott, Suncor has appointed three new independent directors to its Board, effective immediately. The directors appointed are Ian Ashby, former president of BHP Billiton's Iron Ore Customer Sector Group; Chris Seasons, former president of Devon Canada; and Jackie Sheppard, former executive vice president, Corporate and Legal Affairs with Talisman Energy Inc.
"The top priority for Suncor's leadership team is forging ahead with our plans to improve our safety and operating performance," said Suncor's interim chief executive officer Kris Smith. "I look forward to working with the Board, including our new directors, to advance our efforts to drive long-term shareholder value, and to communicating our progress, delivering on our debt reduction and other capital allocation targets and restoring confidence in Suncor."