(Reuters) - Elliott Management Corp on Wednesday urged Marathon Petroleum Corp MPC.N to split into three companies, saying it would boost shareholder value by as much as $40 billion, three years after the activist hedge fund asked the refiner to consider spinning off businesses.

FILE PHOTO: A Marathon Petroleum banner covers an Andeavor sign outside the El Paso refinery following a closed $23 billion deal after the Ohio-based Marathon bought the Texas-based company, forming one of the largest global refiners in El Paso, Texas, U.S., October 1, 2018. REUTERS/Julio-Cesar Chavez

Shares of Marathon, which has a market capitalization of about $36 billion, were up 8.1% at $59.97.

Elliott said its call to separate Marathon’s retail, refining and midstream assets was prompted by the company’s failure to deliver on past promises and “chronic underperformance.”

The company’s shares have fallen 6% this year, compared with a 7.4% gain in the S&P oil and gas refining and marketing index. At the year’s low of $43.96 in August, its shares touched 2016 levels.

Under Elliott’s latest plan, Marathon’s transportation and storage business will become MPLX, a company with an enterprise value of more than $50 billion. Its refining business will be the “New Marathon” with an enterprise value of $29 billion, while its retail business will become Speedway worth about $18 billion.

Marathon said it was focused on increasing shareholder value and would “thoroughly evaluate” Elliott’s proposal.

The hedge fund, founded by billionaire Paul Singer, said on Wednesday it had accepted a “compromise” last time around after “extensive” talks in which Marathon agreed to simplify its midstream business and undertake a strategic review of its Speedway assets.

After the review, the refiner chose to keep its Speedway retail arm, a decision then backed by Elliott.

Marathon later bought rival Andeavor to become the top U.S. refiner and earlier this year completed the merger of midstream units MPLX MPLX.N and Andeavor Logistics LP ANDX.N in a $9 billion deal.

Elliott, which owned 0.7% of Marathon as of June 30, according to Refinitiv data, said it estimated a $22 billion boost to shareholder value from the split and another $17 billion if refining, retailing and marketing operations were to be improved after the separation.

Shareholder DE Shaw, which has a stake of about 0.9% in Marathon, according to Refinitiv data, has backed Elliott’s call to split the company, a source familiar with the matter told Reuters.

Marathon Chairman and Chief Executive Gary Heminger could become a target for disgruntled shareholders, given he has overseen the company since Marathon Petroleum was separated from Marathon Oil Corp MRO.N in 2011.

Heminger’s membership of Marathon’s board of directors is due up for shareholder vote in 2020, according to Marathon’s 2019 proxy statement. At the 2018 annual meeting, shareholders rejected a proposal to create an independent chairman position.

“At this stage, Elliott’s going to have a lot of support, and it is going to be harder for Marathon to fight this,” said Matthew Blair, an analyst at Tudor, Pickering & Holt.

The energy brokerage, which has a “buy” rating and a $69 price target on the stock, had called for the sale of one of Marathon’s refineries and the gathering and processing business of MPLX.

Blair called Elliott’s demands unsurprising, although the proposal to split the company into three was “a little bit more extreme” than expected.