Elliott has built $2.5 billion in stakes in Phillips 66, promoting mid-class business sales.

(Reuters) – Elliott Investment Management said Tuesday it plans to build more than $2.5 billion in stake in US refinery Phillips 66 to drive operational changes and divestment of its mid-level business.

Phillips 66 shares rose 5.8% in morning trade. In March, activist investors revealed $1 billion in stake in Phillips 66. The company then came up with a performance improvement plan to raise shareholder returns and stock prices.

However, Elliott said that Phillips 66’s plan “fails to come to fruition and it has become clear that an urgent change is needed,” and the stock is clearly delaying the stock of rival refiners. It’s done.”

On Monday, Reuters reported that investors had built more than $2.5 billion in stock in Phillips 66.

Phillips 66 did not immediately respond to Reuters’ requests for comments on Elliot’s mid-level business plans.

“Streamlined Phillips includes the sale or spinoff of mid-level businesses, the sale of the company’s profits to CPCHEM, and the sale of jet retailers in Germany and Austria,” Elliott said in a statement Tuesday.

If the company sells or spins off a mid-class business, it could order a valuation of more than $60 billion, investors said.

According to LSEG data, the Phillips 66’s market capitalization was $51.09 billion at the stock’s final closing.

Elliot also emphasized the Phillips 66 board of directors that it needs a new independent director to increase accountability and conduct management reviews.

The hedge fund added that profitability should be prioritized during a period when Phillips 66 is committed to ambitious refinery targets and the refinement margins of most US refiners have declined.

(Reporting by Vallari Srivastava in Bengali, edited by Shinjini Ganguli and Shailesh Kuber)