(Bloomberg) — Oil refiner Phillips 66 is fighting back against activist investor Elliott Investment Management in a letter to shareholders Wednesday.
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The Houston-based company confirmed in its letter that executives met with Elliott earlier this week in New York before the hedge fund forged ahead with announcing its nominees to Phillips 66’s board.
The activist on Tuesday nominated seven directors, including Elliott partner John Pike, for election to Phillips 66’s board. Phillips 66 said it intended to offer to interview Elliott’s director nominees and find “a constructive path forward.”
“The meeting ended with Elliott representatives stating there were no immediate next steps,” Phillips 66’s Chairman and Chief Executive Officer Mark Lashier and lead independent director Glenn Tilton wrote in the letter.
Phillips 66 shares fell 1% at 9:30 a.m. in New York.
Lashier and Tilton added that Phillips 66’s leadership and board was ready to engage with Elliott, which they wrote had shown “no genuine interest in engagement.”
A representative for Elliott didn’t immediately respond to request for comment.
In Elliott’s materials on Phillips 66, released last month after it disclosed a $2.5 billion stake, the activist said that the company should sell or spin off its midstream business to fully realize its value.
In Wednesday’s letter, Phillips 66 said that Elliott had floated the idea of a separation of assets for the first time in talks with the company. Phillips 66 also said that it would seek shareholder approval to declassify its board at its annual meeting after some attempts in previous years.
A classified board means only a handful of seats can be voted on each year. Elliott had earlier said it could withdraw some of its nominees to accommodate the number of seats that come up for reelection.
Last year, the company and Elliott agreed to add Robert Pease, a former president of Shell Trading Co. to its board. His seat is going to be up for grabs this year, the company has indicated.
(Adds shares in the fifth paragraph.)
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