Feb 10 (Reuters) - Activist Elliott Investment

Management has built an over $2.5 billion stake in U.S. oil

refiner Phillips 66 and plans to push for operational

changes to boost its stock, a person familiar with the matter

told Reuters on Monday.

Elliott plans to push Phillips 66 to sell or spin off its

midstream business, the person said.

In March last year, Elliott accepted the performance

improvement plan that Phillips 66 laid out to boost shareholder

returns and share price, after the activist disclosed a $1

billion stake in the company.

Phillips 66 had appointed Robert Pease, a veteran refining

executive, as a director and said it was looking to add a second

candidate. Elliott had asked the firm to add directors with

refining experience that could address underperformance in

refining and speed up cost-cutting efforts.

The company's shares closed at $163.34 apiece on March 28,

2024, days after Elliott accepted Phillips 66's performance

improvement plan. The stock closed at $123.71 on Monday.

Elliott plans to seek a number of changes to simplify

Phillips 66, the Wall Street Journal, which first reported the

story, said on Monday.

The activist investor believes the firm has not yet

fulfilled its commitment to further board changes, WSJ said,

adding that Elliott's new position makes it one of Phillips 66's

top five investors.

Phillips 66 did not immediately respond to a request for

comment outside regular business hours.

Elliott has sought changes at several companies since last

year, most recently taking a stake in oil major BP and

boosting shares to their highest since August in early trade on

Monday.

Last week, Honeywell split up into three independently

listed companies after Elliott took a $5 billion stake in the

industrial giant.