Toms Capital urges Devon Energy to consider sale
Activist hedge fund Toms Capital Management is pressing Devon Energy to review strategic alternatives, including a potential sale of the US oil and gas producer, according to a report by CNBC. Toms believes that that the company's enlarged asset portfolio has created unnecessary complexity and is weighing on its valuation. Toms, which manages more than $4bn, said in a letter to Devon's board that…
Activist hedge fund Toms Capital Management is urging Devon Energy to reconsider strategic options, potentially including a sale of the oil and gas producer, according to CNBC. Toms contends that Devon's large asset base has created complexity and is negatively impacting its valuation. The firm, managing over $4 billion, is now among Devon's five biggest shareholders, a notable rise from earlier in the year.
This increased stake comes after Devon's May merger with Coterra Energy, which significantly expanded its portfolio in key US producing regions. Toms argues that the expanded operations have made Devon harder to manage and contributed to a valuation discount compared to its peers, estimating at least one EBITDA multiple point. The hedge fund is pushing for a comprehensive strategic review that could lead to the entire company being sold.
Toms has enlisted legal expert Alex Spiro to support its campaign, which follows Devon's recent integration with Coterra Energy. Devon's stock rose about 3% on Wednesday, bringing its 2026 increase to over 31%.
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