{"id":13460,"date":"2023-11-29T17:39:57","date_gmt":"2023-11-29T17:39:57","guid":{"rendered":"https:\/\/infundpros.com\/business\/activist-fund-elliott-seeks-board-seats-at-oil-refiner-phillips-66\/"},"modified":"2023-11-29T17:39:57","modified_gmt":"2023-11-29T17:39:57","slug":"activist-fund-elliott-seeks-board-seats-at-oil-refiner-phillips-66","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=13460","title":{"rendered":"Activist fund Elliott seeks board seats at oil refiner Phillips 66"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=d6b7ac67-e2cf-4c9b-a2f2-cf33f4019138\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>The US oil refiner Phillips 66 has become the latest target of Elliott Management after the activist investor took a $1bn stake and called for new blood on the company\u2019s board to remedy \u201cunderperformance\u201d.<\/p>\n<p>In a letter to the board on Wednesday, Paul Singer\u2019s aggressive hedge fund said Phillips 66\u2019s returns had lagged behind peers Valero and Marathon Petroleum and called for the installation of two \u201chighly qualified new directors\u201d.<\/p>\n<p>\u201cWe find the market\u2019s scepticism to be understandable, and 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,\u201d wrote Elliott partner John Pike and portfolio manager\u00a0Mike Tomkins. <\/p>\n<p>Shares in Phillips 66 jumped about 4 per cent on Wednesday. The stock had risen 27 per cent over the past five years to Tuesday, compared with a 64 per cent rise in the S&amp;P 500 oil refining and marketing index over the same period. <\/p>\n<p>The latest campaign from Elliott comes after it prevailed in a stand-off with NRG Energy this month. Following a months-long campaign by the hedge fund, the Texas-based utility and power producer parted ways with its chief executive and agreed to overhaul its board.\u00a0<\/p>\n<p>Phillips 66 was formed in 2012 through a spin-off of oil producer ConocoPhillips\u2019 downstream assets. It is one of the biggest western refining companies, with 12 plants spread across the US and Europe. It has a big presence in the oil pipeline and storage business and sells fuel to consumers via a network of about 7,200 outlets in the US and another roughly 1,300 in Europe.<\/p>\n<p>The Houston-based company is also active in chemicals through a stake in CPChem, which it owns with Chevron. It is converting its San Francisco refinery in California into one of the world\u2019s biggest renewable fuels plants at a cost of $1.25bn. <\/p>\n<p>Mark Lashier, Phillips 66 chief executive, said the company had \u201cengaged in discussions\u201d with Elliott and \u201cwelcome[d] their perspectives and the perspectives of other shareholders on our strategy and the actions we are taking to drive long-term sustainable growth and value creation\u201d.<\/p>\n<p>\u201cWe remain committed to acting in the best interests of our shareholders,\u201d he added.<\/p>\n<p>Elliott said that the company\u2019s performance had declined in recent years \u201cas it has shifted its focus away from its Refining segment\u201d. It cited comments from Lashier in January in which he conceded the company had \u201ctaken our eye off the ball a little bit with respect to refining\u201d.<\/p>\n<p>A cost-cutting programme launched in 2019 had failed to achieve its goals, Elliott said, with a widening gap between its operating costs and that of rival Valero. <\/p>\n<p>Elliott ran a similar campaign against Marathon Petroleum in 2019, which led to the replacement of the chief executive and the spin-off of its Speedway retail operation. <\/p>\n<p>The hedge fund said it was limiting its campaign against Phillips 66 to calling for new directors for now, but hinted that it could push the company to \u201cfollow a similar path\u201d to Marathon through management changes and spin-offs of its stake in CPChem, European convenience stores and some of its non-operated midstream stakes.<\/p>\n<p>\u201cAt present, we believe Mr Lashier and the rest of the management team deserve investor support so long as they demonstrate meaningful progress against these targets,\u201d Elliott wrote. <\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/d6b7ac67-e2cf-4c9b-a2f2-cf33f4019138\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. The US&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-13460","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Activist fund Elliott seeks board seats at oil refiner Phillips 66 | inFundPros<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The US oil refiner Phillips 66\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=13460\" \/>\n<meta property=\"og:locale\" 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