Elliott Management Increases Hess Stake, Sees Higher Value

Elliott Management Corp. boosted its stake in Hess Corp. (HES) to 4.39 percent as the activist investor raised the “intrinsic value” it sees in the oil company to $128 a share.

Elliott continues to press for board changes and the sale or spinoff of certain Hess assets, according to a slide presentation posted online today. The New York-based company’s share price should be $95.70 to $128.46, based on the value of the assets it should divest, Elliott said. It had previously valued the shares at as much as $126.

Hess rose 2 percent to $71.69 at the close in New York, the highest price since July 2011. The shares have gained 22 percent since Hess began announcing asset sales in January after Elliott gave notice of its intention to buy shares. The fund previously owned a 4 percent stake.

Elliott isn’t seeking to remove John Hess as chairman and chief executive officer, John Pike, a portfolio manager for the New York-based hedge fund, said in a phone interview today. A decision on who should lead the company is up to its directors, he said.

The Elliott presentation is “backward-looking,” Jon Pepper, a Hess spokesman, said today in an e-mail.

“The market recognizes that our plan is best placed to create meaningful value for all Hess shareholders,” Pepper said. “Analysts have overwhelmingly rejected Elliott’s flawed and value-destructive agenda to split the company in two.”

To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net

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

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