Hess Should Consider Bakken Spinoff, Elliott Management Says

Hess Corp. (HES) should conduct a full strategic review, including potential spinoff of its Bakken shale assets, Paul Singer’s Elliott Management Corp. said.

The activist investor urged shareholders of the New York- based energy company to vote for five new board members it’s proposing in a letter today. Elliott Management owns 4 percent of Hess’s common stock, the largest initial investment in its 35-year history.

Elliott Management gave notice to the company on Jan. 25 that it would buy about $800 million in shares and seek new board members. Hess yesterday said it will close its last refinery and seek to sell a fuel storage network.

“Lack of focus is a chronic issue at Hess that remains unchecked by the board,” Elliott said in the letter. “New directors are needed for real change.”

The investment firm said the shares could be worth as much as $126 each, more than twice Hess’s $62.48 closing price yesterday. The announcement was made before regular trading began on U.S. markets. Hess rose 2.7 percent to 64.21 at 8:10 a.m. in New York.

Four of Elliot’s proposed board members have senior executive experience at oil companies, according to the letter. The fifth is Harvey Golub, former chairman and chief executive officer of American Express Co. (AXP)

Singer is the founder and president of Elliott Management, which oversees two funds, Elliott Associates LP and Elliott International LP, that have $21.5 billion of assets under management. Elliott last year added two new board members to BMC Software Inc. (BMC) after pushing BMC to consider a sale.

To contact the reporters on this story: Tina Davis in New York at tinadavis@bloomberg.net; Jim Polson in New York at jpolson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.