Hedge fund renews call for Marathon Petroleum to split; shares jump

NEW YORK (Bloomberg) - Elliott Management renewed its push for Marathon Petroleum to split into three separate businesses, a move the hedge fund said would unlock more than $22 billion in value.

Marathon should divide into separate retail, midstream and refining companies, the hedge fund founded by billionaire Paul Singer said Wednesday in a statement. Elliott said it owns about 2.5% of Marathon. Shares of the second-biggest U.S. refiner by market value jumped as much as 7%, the most since Dec. 26.

Marathon has struggled to win investors’ confidence after buying rival Andeavor last year for $22 billion. Though the company earlier this year agreed to merge its Andeavor and MPLX LP pipeline units, Elliott says the corporate structure remains overly complex. The refiner has been one of the poorest-performing U.S. fuel makers, lagging peers like Phillips 66 and Valero Energy Corp.

Carving Marathon into three businesses would create a path to address “the company’s chronic underperformance, to improve its businesses and to unlock significant and sustainable value for its shareholders,” Elliott said. A spokesman for Marathon had no immediate comment when reached by phone Wednesday.

It’s not the first time Elliott has pushed for changes at Marathon. In 2016, it made a similar demand for the company to split its three main businesses. The Findlay, Ohio-based refiner took steps to simplify its pipeline partnership a year later at the hedge fund’s urging, but rejected a proposal to spin off its retail arm, Speedway.

Under Elliott’s plan, Marathon would split into three: the Speedway convenience stores, MPLX pipeline assets and the refining business.