Hess to Exit Retail Business
NEW YORK -- Hess Corp. will fully exit the convenience store and gas station industry, the company announced this morning.
The news comes on the heels of investor group Elliott Management Corp. purchasing a 4-percent stake in Hess, and asking it to spin off or sell its retail division and separate itself into three divisions.
The oil company did not announce if it would spin off or sell the 1,361 convenience stores and gas stations it operated as of Dec. 31.
“Our board and management team have been pursuing a multi-year strategy to transform Hess into a focused exploration and production (E&P) company," said John Hess, chairman and CEO. "The initiatives announced today represent the culmination of this process. By 2014, Hess will be a pure-play E&P company with a tremendous portfolio comprised of higher growth, lower risk assets. We believe we will have the financial flexibility to pursue this growth at the same time that we increase current returns to shareholders and generate significant future value.”
Hess also announced it would exit the energy marketing and energy trading businesses.
In addition, six people will join Hess’ board of directors. Named as new directors were John Krenicki Jr., former vice chairman of GE; Dr. Kevin Meyers, former senior vice president of E&P for the Americas, ConocoPhillips; James H. Quigley, former CEO at Deloitte; Fredric Reynolds, former executive vice president and chief financial officer, CBS Corp.; William Schrader, former chief operating officer, TNK-BP Russia; and Dr. Mark Williams, former executive committee member, Royal Dutch Shell.
Elliott Management felt the change to Hess' board of directors was necessary because the prior board had overseen more than a "decade of failures."
The company will also increase its annual dividend to $1 per share and authorized a share buyback of up to $4 billion.
Investors applauded the moves. Hess' stock traded more than 4-percent higher on the New York Stock Exchange this morning.
Elliott Management was founded by Paul Singer in 1977. He is now the company's CEO.