(Reuters) – Investment fund Elliott Management said on Wednesday it had taken a $1 billion (910.9 million euros) stake in Phillips 66, and asked the refiner to reorganize its board of directors to improve its performance.
In a letter Wednesday to the Houston-based company’s board of directors, the activist fund estimated that Phillips 66 stock, which currently trades around $120, could reach $200 if improvements are made.
Phillips 66 is lagging its U.S. rivals in refining as fuel demand and margins have soared in the sector. Its second-quarter profit fell short of Wall Street estimates.
“Given the company’s history of failures, we believe shareholders would welcome the appointment of two new directors with refinery operating experience to the board,” wrote John Pike, partner at Elliott Management , and Mike Tomkins, portfolio manager, in the letter, made public.
Philipps 66 chief executive Mark Lashier admitted to having discussions with Elliott Management. However, he did not say whether the company was willing to welcome two recommended directors to its board.
Phillips 66 welcomes “their views and those of other shareholders on our strategy and the actions we are taking to drive long-term sustainable growth and value creation,” Mark Lashier said in a statement. “We remain committed to acting in the best interests of our shareholders.”
On the New York Stock Exchange, Phillips 66 shares gained more than 3%.
(Reporting by Svea Herbst-Bayliss in Providence, Gary McWilliams in Houston, Tanay Dhumal in Bangalore; Blandine Hénault and Gaëlle Sheehan for the French version)
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