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Elliott Management won two seats at the PHILLIPS 66 Petroleum Refining Board, after the activist coverage fund was faced in its first power vote against an important American corporation.
Phillips 66 shareholders voted in favor of two directors backed by Elliott. The former Conocophillips executive, Sigmund Cornelius, and the former Targa Resources Executive, Michael Heim, were chosen for the Board, Elliott and Phillips 66 said in separate statements on Wednesday.
The current director of the Board, Bob Pease, who was previously backed by Elliott in an earlier agreement with Phillips 66 before the activist investor turned against him, and Nigel Hearne, Harbor Energy’s operations director, were the nominated for Phillips 66 added to the Board, the company said.
The vote limits one of the most volatile and controversial activist campaigns in the recent memory, in which Elliott doubled its participation to $ 2.5 billion and pushed the oil refinement to sell assets, including its joint company and company of Midstream chemicals, clean its corporate governance and focuses on its main competition of oil refining, on an attempt to improve its performance in comparison in comparison The industry.
The funds controlled by Blackrock Passive Money Administrators, State Street and Vanguard Group, which collectively have about 23 percent of the shares, as well as the T Rowe Price Coverage Fund voted against Elliott, people familiar with the matter said. Retail investors represent approximately 25 percent of the shareholders base.
The presence of only two directors backed by Elliott on the board could still lead to a change of strategy. The coverage fund said that its two directors of the Board “will work in collaboration with the regular directors to improve the operational execution and the performance of the shares, improve the corporate governance and help establish a strategic course that can unlock the potential for the potential for the creation of total value of Phillips 66”.
Phillips 66 shares fell 6.8 percent on Wednesday morning in New York, giving the oil refiner a market value of almost $ 46 billion. His actions have dropped 22 percent during the past year.
On three occasions, Elliott’s campaigns have gone to the edge of a vote against an American company. The activist inverter pointed to the oil and gas company HESS in 2013, Industrials Group Arconic in 2017 and Southwest Airlines in 2024: all settled at the eleventh hour.
The first indication that Elliott would probably go to the distance against Phillips 66 occurred this month when the advisors of influential power Glass Lewis and then the institutional shareholders services recommended that their clients of Fund Administrator vote 3-1 and 4-0, respectively, in favor of the list of ELLIOTT directors.
Until Wednesday’s vote, there was no contact between the heavy activist weight and Phillips 66 management since February. At that time, the senior manager of the Elliott portfolio, John Pike, and one of his lieutenants described his demands to the company’s executive director, Mark Lahier, flanked by his advisors, in New York.
An Elliott proposal to eliminate the mode of choice of the Phillips 66 Board did not reach the threshold of 80 percent required to approve, the company said in a statement.
In the first indication of divestments, Phillips 66 announced last week the sale of a majority participation in its 970 jet service stations in Germany and Austria to private capital groups Energy Ecation Partners and Stonepeak for $ 1.6 billion. Elliott argues that Phillips 66 could generate around $ 40 billion by selling its commercial and non -basic assets.
After first publicly participating in Phillips 66 in 2023, the company negotiated a peace with Elliott offering to put two independent directors on the Board. But Phillips 66 only continued adding a director, Pease, whom Elliott argued quickly became captive for Phillips 66 management after approving a movement that allowed Lashier to also become president.
