The proxy battle between Hess Corp. and activist investor Elliott Management is intensifying ahead of the energy company's annual meeting later this month
It's been a long-running feud between the New York-based hedge fund, which is pushing for changes, and Hess, which has accused the firm of trying to disrupt progress it has already made in reshaping itself.
Hess said in March that it plans to sell its retail gas stations business, along with its energy trading and marketing businesses, as it shifts its focus further toward exploration and production. The company also has announced plans to sell U.S. oil storage terminals and plans to close a New Jersey refinery as it exits the volatile refining business.
Elliott argues those moves fall short of the kind of change that is needed at the company and is seeking the nomination of its own slate of nominees. The hedge fund's efforts got a boost last week when influential firm Institutional Shareholder Services backed Elliott's argument and recommended that investors support Elliott's slate of five nominees.
Hess had already rejected Elliott's nominees and said Monday that it believes that the ISS report on the proxy contest is "a fundamentally flawed analysis" that does not address key issues, such as a "highly problematic compensation scheme" put in place for Elliott Management's dissident nominees.
ISS said in a statement Tuesday that Hess's claims are unfounded.
Elliott Management also fought back again, saying that Hess's intolerance of ideas different from its own is a major cause of its underperformance and argued shareholders vote in favor of its nominees.
Like those of many other energy companies, Hess shares fell sharply after the recession but have rebounded. Its shares lost 20 cents to close at $72.26 on Tuesday, but they have gained more than 43 percent from a year ago.
- Basic Materials Industry
- Elliott Management