Elliott Builds $2.5 Billion Stake in Phillips 66, Pushes for Midstream Business Sale

Elliott Investment Management L.P., a prominent activist investor, has amassed a $2.5 billion stake in Phillips 66 (NYSE: PSX), making it one of the top five shareholders of the U.S. oil refiner. Elliott's significant investment comes less than a year after it initially disclosed a $1 billion position in the company, signaling its growing influence over Phillips 66's strategic decisions. The activist investor has been pushing for operational restructuring, particularly regarding the midstream business, and has now expanded its stake to intensify pressure for change.

Phillips 66's midstream business, which includes the transportation, storage, and processing of crude oil and natural gas, has been a focus of Elliott's attention. The activist investor aims to push for the sale or spinoff of this business to streamline the company's structure and enhance shareholder value. Elliott's latest investment, which places it among Phillips 66's top five shareholders, underscores its commitment to driving operational improvements and increasing shareholder returns.

Phillips 66 has not immediately responded to Benzinga's request for comment on Elliott's latest stake and its push for the midstream business sale. However, the company has previously acknowledged Elliott's involvement and has committed to performance improvements, including a $163.34 to $123.71 stock price decline since March 2023.



Elliott's push for the midstream business sale aligns with its recent pattern of industrial sector activism, which includes its stake in BP Plc and its role in Honeywell's three-way split. The activist investor's latest move in Phillips 66 comes as the company faces pressure to address unfulfilled promises and operational inefficiencies, as indicated by its stock price performance.

Phillips 66's midstream business has been a significant contributor to the company's overall profitability, with the segment reporting $673 million in earnings in the fourth quarter of 2024, compared to $346 million in earnings for the refining segment. However, Elliott believes that the sale or spinoff of this business could unlock additional value for shareholders and improve the company's overall performance.

In conclusion, Elliott's $2.5 billion stake in Phillips 66 and its push for the midstream business sale reflect the activist investor's growing influence over the company's strategic decisions. As one of the top five shareholders, Elliott is well-positioned to drive operational improvements and increase shareholder returns. The sale or spinoff of the midstream business could potentially unlock significant value for shareholders and enhance Phillips 66's overall performance.