Elliott Management has nominated seven directors to the Phillips 66 board, laying the groundwork to push for changes that include spinning off or selling its midstream business.

Elliott Investment Management nominated seven directors to Phillips 66's board, laying the groundwork to push for changes that include spinning off or selling its midstream business, two people familiar with the matter said.

Elliott Investment Management is heading toward a proxy battle with Phillips 66 after failing to reach an agreement with the energy group’s leadership on a path to improving performance.