Devon Energy shares rose approximately 3% after activist hedge fund Toms Capital Management urged the company to explore a full sale. Toms Capital revealed in a letter that it is now a top five shareholder. The fund manages over $4 billion in assets and has recruited high-profile litigator Alex Spiro to join its campaign.
Toms Capital argues that Devon's portfolio became overly complex following its merger with Coterra Energy. This complexity resulted in a stock valuation discount compared to industry peers. The fund contends a strategic buyer would be better positioned to manage the risks of divesting non-core assets.
This move increases pressure on the company from multiple fronts. Fellow investor Kimmeridge Energy Management has also advocated for Devon Energy to streamline its assets.