Elliott Investment Management announced it has built a stake of over $2.5 billion in Phillips 66, positioning itself as a top-five shareholder. The activist investor plans to push for significant operational changes and the potential sale of the company's midstream business.
Elliott issued a letter and presentation outlining its 'Streamline66' plan, which includes streamlining the portfolio through a sale or spin-off of the midstream business and a potential sale of its interest in CPChem. The plan also calls for initiating an operating review to achieve ambitious refining targets and adding new independent directors to the board.
Elliott argues that Phillips 66 trades at a significant discount to its sum-of-the-parts valuation and that its plan could yield a share price of approximately $200 per share. This move escalates Elliott's engagement with Phillips 66, which began in November 2023 with a $1 billion investment and initial criticisms of underperformance.
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