No Drive to Liquidate Hess

Investor questions use of "scare tactics," calls convenience store divestment plans “incomplete”

Published in CSP Daily News

NEW YORK -- Elliott Management Corp. said it's not trying to liquidate Hess Corp. and the New York-based oil company is using "scare tactics" to convince shareholders to support its proposed slate of directors, according to a Bloomberg report.

John Hess, the company's chairman and chief executive officer, wrote in a letter to Relational Investors LLC this past week that Elliott Management was trying to liquidate Hess, a statement the New York hedge fund disputed in an e-mail to Bloomberg.

Hess has proposed a slate of six new board members and said it would exit its gasoline station and energy-trading businesses as it becomes an oil exploration and production company. Paul Singer's Elliott Management, which owns a 4% state in Hess, has proposed its own slate of directors and called the company's plans "incomplete."

"Elliott has never suggested liquidating the company, and it is disappointing John Hess has resorted to scare tactics," the fund said in a statement. Jon Pepper, a Hess spokesman, confirmed the Relational letter.

Relational Investors, which holds 2.7% of Hess, said it wants the company to avoid a proxy fight with Elliott. Hess should join its nominees with the Elliott slate to form a new board, David Batchelder, principal of Relational, told Bloomberg.

"We've been urging John and the board at Hess for some time now to reach out to Elliott and begin to negotiate a resolution," Batchelder said. "We urged the board not to get defensive."