Elliott Investment Management Acquires $1 Billion Stake in Phillips 66, Calls for Board Revamp

Activist investor criticizes refining operations, supports CEO's plan for cost-cutting and asset sales, and suggests adding two directors with refining experience.

• Elliott Investment Management has taken a $1 billion stake in Phillips 66, the third-largest independent U.S. refiner, and is urging the company to revamp its board to boost performance.
• Elliott criticized Phillips 66's refining operations, stating that management had taken its 'eye off the ball' by letting operating expenses soar and causing underperformance in refining.
• Phillips 66's CEO, Mark Lashier, has acknowledged discussions with Elliott and laid out a plan to boost returns by cutting costs and assets, including potentially selling or spinning off $3 billion in assets next year.
• Elliott supports Lashier's plan but believes that achieving these goals will require oversight given Phillips 66's history of failed execution, suggesting the appointment of two new directors with refining-operating experience.
• Shares of Phillips 66, which has a market value of $52 billion, were up 3.3% following the news.

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