In the US, Toms Capital urges Devon Energy to consider a sale — CNBC
In the United States, activist hedge fund Toms Capital Management has urged Houston-based oil and gas company Devon Energy to consider strategic alternatives, including a sale of the business. As CNBC reports, the fund outlined its position in a letter sent to the company earlier this month.
The fund's arguments
Toms Capital, which manages more than $4 billion in assets, said in the letter that it had become one of Devon's five largest shareholders. As of the end of June, the fund was not among the company's 10 largest shareholders, according to the latest available data.
The fund believes that the combination of Devon's assets creates excessive complexity for the company and contributes to a discount in its valuation compared with competitors. According to Toms Capital, this discount amounts to at least one multiple point. Devon shares trade at a multiple of about 4.5 times projected EBITDA for 2027.
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Devon Energy's portfolio
In May, Devon completed its merger with Coterra Energy, significantly expanding its portfolio in the Delaware Basin, an important oil and gas producing area of the Permian Basin in western Texas and southeastern New Mexico. The combined company's portfolio also includes assets in the Marcellus, Eagle Ford and Powder River basins.
Before sending the letter, Toms Capital had already proposed that Devon simplify its asset portfolio. The fund now insists on the sale of the entire company, arguing that a potential buyer could later sell individual assets itself. In the fund's view, this would shift the execution risks of such transactions from Devon shareholders to the new owner.
Similar demands had previously been made publicly by energy-focused investment firm Kimmeridge. It urged Devon to optimize its asset portfolio and present a strategy following the merger with Coterra. Devon and its advisers did not provide comments to CNBC. During Wednesday trading, Devon shares rose by about 3%, and by more than 31% since the beginning of 2026.
