Devon Energy (DVN) was urged earlier this month by activist hedge fund Toms Capital Management to review strategic alternatives, including a sale, CNBC reported Wednesday, citing a letter it viewed.

In the letter, Toms claims Devon's merger with Coterra Energy, which closed in May, introduces a heightened level of complexity to the company and contributes to what it sees as a valuation discount to its peers of at least one multiple point, the report said.

Toms states it is now one of Devon's top five shareholders, CNBC reported, noting that the fund was outside the top 10 holders at the end of June based on regulatory filings.

Devon and Toms didn't immediately reply to requests for comment from MT Newswires.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Price: 48.36, Change: +1.43, Percent Change: +3.04