NEW YORK, Feb 11, 2025 (V7N) – Activist hedge fund Elliott Investment Management has built a $2.5 billion stake in U.S. oil refiner Phillips 66 (PSX.N) and is pushing for major operational changes to boost shareholder value, sources told Reuters on Monday.

Elliott wants Phillips 66 to sell or spin off its midstream business, aiming to simplify operations and unlock more value. The fund previously accepted a performance improvement plan from the company in March 2024 after initially disclosing a $1 billion stake.

Phillips 66 responded by appointing refining veteran Robert Pease to its board and committed to adding another director with deep industry experience. However, Elliott now argues that the company has not fully delivered on its promises to optimize refining operations and accelerate cost-cutting efforts.

After Elliott’s backing of the 2024 plan, Phillips 66 shares hit $163.34 in late March but have since declined, closing at $123.71 on Monday. The activist investor sees this as a sign that more changes are needed to improve shareholder returns.

The Wall Street Journal reports that Elliott's new stake makes it one of Phillips 66's top five investors, and the firm is expected to push for further restructuring and governance changes. Elliott has a long track record of influencing corporate strategy at major firms.

In response, Phillips 66 stated that it remains open to constructive dialogue with Elliott and all shareholders, signaling potential talks in the coming weeks.

Elliott has been on an aggressive campaign across industries, recently taking a stake in oil major BP, boosting its stock to a multi-month high, and forcing Honeywell to split into three independent companies after acquiring a $5 billion stake in the industrial giant.

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