Elliott takes $1 billion stake in Phillips 66, plans to seek two board seats

Elliott Management has taken a $1 billion stake in Phillips 66 and is seeking as many as two board seats, according to Wednesday letter from the activist investor.

Phillips 66 stock rose 4.6% in early trading. The crude refining company has a market cap of about $52 billion. CNBC's David Faber originally broke the news.

Elliott's push for the board seats comes as Phillips has underperformed its competitors Marathon Petroleum and Valero. The activist investor said in the letter to Phillips' board that the company's performance has declined in recent years because it has shifted its focus away from its refining segment.

"Over the past three years, as Phillips 66 has fallen further and further behind, its stock has meaningfully underperformed these peers," Elliott wrote.

The activist investor said Phillips operating expense per barrel has soared in recent years, "shaking investor confidence in the company's ability to run its refining operations efficiently."

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