Hess Fights Back Against Elliott Management
As CSNews Online reported, Elliott Management hosted a "Reassess Hess Town Hall Meeting" in New York City’s Le Parker Meridien hotel in an effort to express its lack of patience in Hess’ board following "17 years of underperformance." In addition, the activist group that owns 4.52 percent of Hess -- valued at more than $1 billion -- introduced Rodney Chase, Harvey Golub, Karl Kurz, David McManus and Marshall Smith, whom it hopes will be elected to Hess’ 14-member board of directors on May 16.
A new letter from Hess – the fifth it has sent to shareholders – discredits Elliott Management by alleging its statements are "misleading" and its strategies intended to boost the oil company’s share price are "flawed."
In this latest letter, Hess again asks shareholders to approve its restructuring plan, which calls for the company to become a pure-play exploration and production company, in part by selling off its entire retail division of 1,361 convenience stores and gas stations.
"Hess’ strategy is working. Why is Elliott trying to change it?" the letter states. "Elliott launched its campaign to effect a breakup plan they have touted as the best strategy to ‘unlock’ shareholder value. This flawed agenda has been roundly rejected by nearly every research analyst covering Hess, while the Hess transformation strategy has been widely applauded by the same analysts. "
The letter continues by alleging Elliott Management is enticing its proposed board of director nominees by "promising to separately pay them large bonuses based on short-term stock price appreciation."
The letter concludes by touting the experience and acumen of the individuals Hess has nominated to join its board. Hess’ proposed new nominees are John Krenicki Jr., Dr. Kevin Meyers, Fredric Reynolds, William Schrader and Dr. Mark Williams, who combined have served a variety of companies including ConocoPhillips Inc., Royal Dutch Shell plc and General Electric Co.
"Hess’ slate comprises some of the best business executive in the world with the right experience and expertise for Hess," stated the letter, signed by Chairman and CEO John Hess. "The entire Hess slate is new and independent; they agreed to work on behalf of all Hess shareholders and evaluate both Hess’ plan and Elliott’s plan."
Currently, John Hess owns 10 percent of the New York City-based oil company's shares, making him the only person or entity that owns more of the company's stock than Elliott Management.