- Toms Capital, which manages just over $4 billion, sent a letter earlier this month urging Devon Energy to review strategic alternatives, including a sale, and is now one of Devon's top five shareholders.
- Toms argues Devon's post-Coterra portfolio complexity causes a valuation discount to peers of at least one multiple point, with the stock trading at roughly 4.5 times 2027 estimated EBITDA.
- Toms asserts a strategic buyer of the entire company could subsequently divest assets, shifting execution risk away from Devon holders.
- Devon shares added about 3% in Wednesday trading, bringing their 2026 gain to more than 31%.
- Kimmeridge, another Devon investor, has publicly urged the company to streamline its property portfolio and articulate a post-Coterra merger strategy.
Quotes
“Toms claims that combination of properties brings an undue level of complexity to the company and contribute to what is, in its view, a valuation discount to its peers of at least one multiple point, which is significant given the stock trades at roughly 4.5 times 2027 estimated EBITDA.”
“Toms, which manages just over $4 billion in assets, says in the letter viewed by CNBC it is now one of Devon's top five shareholders.”
“Devon shares added about 3% in Wednesday's trading, bringing their 2026 gain to more than 31%.”