Elliott activists call Phillips 66 to alleviate three approaches

Business: Phillips 66 It is an energy manufacturing and logistics company. It works through the following segments: central, chemicals, refining and marketing and specialties (M & S). Motstream segment offers crude oil and oil products transport, terminal and processing services, as well as natural gas and liquids of natural gas (NGL) Transportation, Storage, Treatment and Marketing Service. Chemical Segment Chevron Phillips Company Company Company Company (CPCHEM) forms investments of 50% of the company, manufacturing and marketing world-class petrochemicals and plastics. Refining businesses are burned in oil products and other foods in oil products, such as petrol, distilled and flying fuels, as well as renewable fuels, 12 refineries in the US and Europe. Finally, sell marketing and specialties and shopping markets oil products and renewable fuels.

The stock value: $ 52,88b $ 128.04 per share)

February 11, Elliott issued the letter And the presentation of Phillips 66 “reraline66”, a plan to resolve the continued government practices and corporate corporate corporate practices. It includes the following steps: (i) Play the company’s portfolio through the sale of the central business or spin-off, as well as potential sales interested in CPCHE; (II) Starting the exploitation review, committed to ambitious refining goals and closes the EBITDA-per-barrel gap with classmates; and (iii) increases the supervision and bolts of the Directorate of Phillips 66. Adding new independent directors to the board.

However, Elliott active active actions played the way we wanted to do so, as many perceives. Companies have given CEO Mark Lashier a significant option for $ 2025 million EBITDA targets of $ 20 billion, increasing the disappearance of $ 3 billion in the return of the long-term return capital. They agreed quickly and in a way to add two new directors in the company. The company added Robert Pease, a former cenovus executive to the table February 2024And in the coming months he agreed to continue working with Elliott to identify a second director. The second director never took place.

A year later, Elliott increased to $ 2.5 billion and will be more active to create the value of shareholders, send the public letter and presentation “attention66”. Elliott identifies three main sources of PSX addiction. First of all, the company stated that its own value of the company has been an effective conglomiterated structure, and as a result, it matches the lowest refining segment, although EBITDA comes from other businesses from other businesses. Secondly, the operation of the PSX operation does not meet the management goals and the return remains backage. In 2024, PSX annually spent EBITDA $ 4.5 trillion and 8.7 billion dollars, a short target of $ 1425 million. The company has risen two consecutive quarter of the opponent of the Barrel, and its EBITDA Barrel returned only VLO VLO. The third, Elliott says that there has been a constant claim against any successful financial management with credibility investors. In addition, the company said the Commission has failed in basic duties, rewarding management with components of the company’s performance.

This is Elliott to release his three-point plan. First, Elliott proposes to spinning or selling Central Assets of PSX, calculating approximately $ 45 million to $ 45 million in the sale of a strategic buyer. In addition, Elliott also suggests the Sales of CPCHEM and JET, calculated that net $ 48 million of $ 48 million would be equivalent to 96% of the company’s current market. Increasing this amount of capital may allow PSX to purchase between 60% and 90% of the company’s shares and increase the payment ratio to 100% of free cash flow. If you add new management to the industry and operational experience, PSX can be followed by PSX to improve their EBITDA barrels and improve its goals.

Elliott calculated that this plan can provide a price about $ 200 per share. In addition, the company confirms that if the PSX run by Elliott employed by MPC, the shares could increase more than $ 300. In Marathon, Elliott helped to add a new manager, closing the gap for each Vloko barrel EBITDA, with retirement of 50% of its shares, and the SPEEDWAY retail sales sale after $ 17 after cash revenue. Elliott since He sent his first letter to the marathon On November 21, 2016, MPC VLO and PSX has exceeded 56% and 11%, respectively.

Being a good plan is the first step, it is another story to establish. This time, Elliott will not be established by a management or two, especially when PSX continued to continue the second director with the last time in the refinery experience. Elliott gave management time to run. Management failed. Now, Elliott will do it, but he didn’t: management responsibility. Elliott does not explicitly indicate that he seeks to replace high-level management, but the management discusses affected credibility and erodes the trust of investors and is difficult to replace without replacing management. It also makes Elliott Cete CEO Replacement Marathon and Suncor had success in their commitments as the first item. With the company’s designation window this week and 14 people with four election management, Elliott will designate the entire slate of four management, while preserving its possibilities, discussing governance.

Ken Squire is the founder and president of the 13D monitor, institutional research on shareholder activism and the founder and portfolio of the 13D activist fund, which invests in the 13d investment activist portfolio.