MOSCOW (MRC) -- Hedge fund Elliott Management unveiled a 4% stake in Marathon Petroleum Corp on Monday, urging the company to launch a strategic review and consider spinning off its three main businesses, said Reuters.
Marathon responded by saying it disagreed with the letter and was moving ahead with its own plan as fast as possible, a reply that signaled rising tension between the refiner and the activist investor.
Marathon has hired boutique investment bank Evercore Partners to advise on its engagement with Elliott, people familiar with the matter said. Marathon and Evercore did not immediately return calls seeking comment on the defense plan.
The deadline for Marathon shareholders to nominate directors is Dec. 15, meaning Elliott could seek board seats if talks between the two sides fail to improve.
Elliott, which joins fellow activist Jana Partners as a Marathon shareholder, also said the company needs to speed up its so-called "drop down" plan related to its master limited partnership, MPLX Inc. Findlay, Ohio-based Marathon last month said it would seek to place some of its assets into MPLX, a move Jana said it supports.
Elliott, however, said in a letter to Marathon's board that the company should proceed with the drop down immediately and should better communicate what exactly is being put into MPLX.
Marathon should consider spinning off just Speedway, its retail chain of gasoline and convenience stores, or to separate all three of its retail, refining and pipeline businesses. Marathon shares were up 5 percent at $45.70 on Monday while MPLX's stock was up 3 percent to USD33.98.
The company said it disagreed with Elliott and was confident in its plan to deliver substantial shareholder value.
As MRC informed earlier, Marathon Petroleum plans to buy MarkWest Energy Partners, the second-largest US processor of natural gas, for about USD15.8 billion in stock and cash.
Marathon Oil Corporation is a United States-based oil and natural gas exploration and production company. Principal exploration activities are in the United States, Norway, Equatorial Guinea, Poland, Angola and Iraqi Kurdistan.
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