ByCharles Kennedy– Apr 21, 2025, 9:30 AM CDT
U.S. refiner Phillips 66 told shareholders on Monday that they should keep in mind that activist investor Elliott, which wants to break up one of the biggest U.S. refiners, may not necessarily act in Phillips 66 shareholders’ interests as it is pursuing an acquisition of Citgo, a direct competitor of Phillips 66.
Activist hedge fund Elliott Investment Management has called on Phillips 66 to spin off its midstream business and tighten up operations.
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However, Elliott is also pursuing an acquisition of Citgo, the U.S.-based refiner of Venezuela’s PDV Holding, in a court-ordered and supervised auction of assets of the Venezuelan state oil firm PDVSA.
Earlier this month, Phillips 66 told shareholders that Elliott’s demands for breaking up the company are misguided, based on inflated and unrealistic assumptions, and would destroy shareholder value.
Elliott, which has an investment worth more than $2.5 billion in Phillips 66, has made the case to the refiner’s shareholders that “Phillips investors’ patience has been punished, and a new lineup on the Board is necessary to reverse the Company’s long-term underperformance and improve its poor corporate governance practices.”
Amid the ongoing board fight, Phillips 66 issued on Monday a new letter to shareholders, in which it reminded them that “It is also critical to remember that Elliott’s interests likely differ from other Phillips 66 shareholders, given Elliott is pursuing an acquisition of a direct competitor – CITGO.”
“For more than a year, Amber Energy, a company wholly owned by Elliott, has been bidding for CITGO and the process remains ongoing. Their bids for CITGO have been meaningfully above the value of Elliott’s investment in Phillips 66.”
“This conflict is concerning because Amber Energy’s executives are actively helping support Elliott’s case to undermine Phillips 66’s strategy,” the U.S. refiner said.
Phillips told shareholders in the letter, “Do not let Elliott, the parent company of Amber Energy, undermine Phillips 66’s Board and strategy. Protect the long-term value of your investment.”
By Charles Kennedy for Oilprice.com
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