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Replace 10:35pm: Provides Phillips 66 remark.
Phillips 66 (NYSE:PSX) rose 4% after activist investor Elliottt Funding Administration disclosed it had taken a $1 billion stake within the refiner and is in search of board seats.
Outstanding activist hedge fund Elliott is in search of two board seats at Phillips 66 (PSX), based on a letter and statement from the acitivist on Wednesday. Elliott sees about 75% upside to PSX’s present inventory pric
“We believe the Board must take several steps to reassure investors that Phillips 66 is in the best possible position to achieve its value-creation potential,” Elliott stated within the assertion.
Elliott desires Phillips 66 (PSX) to shut the present $2-3 per barrel refining EBITDA hole between PSX and Valero (VLO). The activist believes PSX might generate $15 billion to $20 billion in after-tax money proceeds from the sale of PSX’s CPChem stake, European comfort shops, and a portion of its non-operated midstream stakes.
Phillips 66 (PSX) issued a press release late Wednesday that it has has held discussions with Elliott during the last a number of weeks and plans to proceed a “constructive dialogue.”
“We agree with Elliott that successful execution of our strategic priorities will drive substantial stock price performance and believe that we have the right management team and Board in place to deliver long-term, sustainable value,” Phillips 66 stated within the assertion.
Elliott is concentrated on Phillips 66 (PSX) underperformance within the refining space. Phillips 66’s opex/bbl is larger than that of Marathon Petroleum (MPC) and Valero (VLO).
“We believe this lack of opex discipline has been a key driver of the company’s stock-price underperformance, particularly in the context of the substantial improvements made by its similarly situated peer Marathon,” Elliott’s John Pike and Mike Tomkins wrote within the letter. “Achieving safe, reliable and efficient refining operations is paramount to reversing Phillips 66’s underperformance.”
Information of the Elliott stake was earlier reported by CNBC.
Elliott disclosed in its Q2 13F in submitting in August that it bought 775K shares of Phillips 66 (PSX) in Q2.
