Hedge Fund Makes Large Investment in Marathon Petroleum

FINDLAY, Ohio -- Marathon Petroleum Corp. has a significant new shareholder. In a U.S. Securities and Exchange (SEC) filing, hedge fund Jana Partners disclosed it purchased a 5.5-percent stake in the parent company of Speedway LLC. The investment equates to $636 million, or 19.7 million Marathon Petroleum shares.

Jana Partners, founded by Barry Rosenstein, is not expected to sit back and just quietly watch its investment grow, according to Bloomberg News. The hedge fund is known to be aggressive when it comes to pushing companies to sell poor-performing divisions, make major strategic moves or break up.

Jana Partners' investment may seem curious, as Marathon Petroleum is the result of a spinoff from its parent company, Marathon Oil Corp., just last year. However, the news outlet reported that some analysts believe Marathon should enact further separation in its refinery business.

In its SEC filing, the hedge fund said it has already talked with Marathon Petroleum about its "business strategy, corporate and asset structure, capitalization, dividend and repurchase policy, governance and related matters."

In addition, Jana Partners said in its filing that it "may take other steps seeking to bring about changes to increase shareholder value, as well as pursue other plans or proposals."

Jana Partners has already pushed publisher McGraw Hill and energy company El Paso to break into two smaller companies.

Jana Partners also said in its filing that it has the option to purchase an additional 896,000 shares of Marathon Petroleum at $27.50 per share. The hedge fund must exercise those options by Feb. 17. Barring a stock market collapse in the next month, it seems likely Jana Partners will exercise the options because Marathon Petroleum was trading above $37 per share in New York Stock Exchange trading this morning.

The hedge fund is now the company's largest shareholder. Prior to Jana Partner's purchase, Alliance Bernstein LP had been Marathon Petroleum's largest shareholder with 5.36 percent of the company, according to FactSet Research.

A Marathon Petroleum spokesperson declined comment when reached by NASDAQ.