Phillips 66 (PSX) is once against urging its shareholders to vote against measures proposed by Elliott Investment Management at the company’s upcoming annual shareholder meeting on May 21.

In an April 8 letter to its shareholders, PSX’s board of directors pushed its current strategy and laid out what it called the risks of Elliott’s plan for the company.

Elliott is one of Phillips 66’s largest investors with a $2.5 billion stake. The investment company has pushed for several operational and leadership changes at Phillips 66, including a divestment of its midstream business and board changes.

In March, Elliott nominated seven independent directors to Phillips 66’s board. Phillips 66 has been strongly opposed to Elliott’s nominations.

In the letter, the board unanimously recommended stockholders vote for Phillips 66’s nominees on the white proxy card at the meeting.

The letter called Elliott’s proposals “rapid, irreversible changes in a pursuit of an unrealistic thesis.”

Elliott has been pushing Phillips 66 to sell or spin off its midstream business, arguing that it could be valued at more than $40 billion. The plan, termed “Streamline 66” by Elliott, is detailed on the investment firm’s website.

On April 3, Elliott again issued a letter to Phillips 66 shareholders detailing the benefits of such a sale—including a simplified portfolio with a greater focus on refining.

In its April 8 letter, the PSX board insisted that its midstream business is in its early stages and that a spin-off was unrealistic.

“Their analysis of a potential sale of the midstream business unrealistically asserts that cash buyers exist at a $50 billion price tag and would pay for 100% of synergies, both of which are highly unlikely. In addition, tax leakage costs could be as high as $10 billion,” PSX’s board said. 

Elliott’s April 3 letter argued the company should prioritize shareholder value and that other shareholders have shared a desire for change at the energy company.

Elliott encouraged shareholders to vote on the gold card for Elliott’s director nominees and governance changes.

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