Elliott reveals a $1.0 billion stake in Phillips 66: here’s what it wants

Phillips 66 (NYSE: PSX) opened about 3.0% up on Wednesday after Elliott Investment Management revealed a sizable stake in the crude refining company.

Elliott is pushing for board seats at Phillips 66

The activist investor has built a stake worth $1.0 billion and is pushing for two board seats.

Elliott attributes the recent underperformance in Phillips 66 to insufficient focus on the refining business. A continued increase in its operating expense per barrel has also shaken “investor confidence in the company’s ability to run its refining operations efficiently”.

The news arrives about a month after Phillips 66 reported earnings for its fiscal third quarter that came in shy of Street estimates as revenue decline year-on-year.

Note that Elliott Investment Management did also announce a $2.0 billion stake in Crown Castle this week as Invezz reported here.

Elliott is behind CEO Lashier’s recent plan

Mark Lashier – the Chief Executive of Phillips 66 recently committed to increasing focus on refining, unloading $3.0 billion worth of non-core assets, and improving the long-term capital return policy.

All in all, he’s targeting $14 billion of EBITDA by 2025. In its letter to the board on Wednesday, Elliott said it’s behind these goals that, if delivered, could see the energy stock climb a whopping 75% from here.

If Phillips 66 fails to hit what it’s targeting for 2025, however, the activist investor would consider pushing for a new chief executive, it added.