Elliott Investment Management LP has taken a significant stake in Phillips 66, worth over $2.5 billion, and is urging the energy company to sell or spin off its midstream unit. The move comes as shares rose nearly 4% on Tuesday morning.
According to Elliott, Phillips 66’s midstream business could fetch more than $40 billion. The activist investor believes this standalone business should be separated from the corporate structure that hampers its value.
In addition to recommending a sale or spin-off of the midstream unit, Elliott is pushing for Phillips 66 to divest non-essential assets and focus on its core refinery business. This includes Chevron Phillips Chemical, a joint venture between Chevron U.S.A. Inc. and Phillips 66. The hedge fund also wants new independent directors added to the board.
This move follows Elliott’s successful campaign at Honeywell, where it took a stake of over $5 billion and pushed for the company to split into three independent companies. Last month, Phillips 66 reported a fourth-quarter adjusted loss despite beating analyst expectations.
The stake in Phillips 66 is one of the largest in the company, and Elliott’s efforts aim to boost the stock price.
Source: https://finance.yahoo.com/news/elliott-builds-more-2-5b-155803574.html