Activist hedge fund Elliot Management Corp., involved in a proxy battle with oil and gas company Hess Corp. (HES), said Tuesday that it has proposed a new reconstituted board for Hess that will include all nominees of the company as well as its own nominees. Elliott said it has proposed a "constructive resolution" to end the proxy fight.
Elliott, which beneficially own more than 4 percent of Hess shares, said in a statement, "Consistent with Hess's promise to refresh the Board, Elliott proposes that all Shareholder Nominees and all Management Nominees step onto a reconstituted Board—the size and composition to be agreed upon. Shareholders want real change and a renewed Board. Hess has promised such renewal and this solution will follow through on that promise."
Elliott has strongly advocated for New York-based Hess to conduct a strategic and operational review to consider pathways to maximize shareholder value. This includes implementing a substantial divestment program with a potential spinoff of the Bakken asset to refocus the Hess portfolio, improving operations and accountability, and bringing greater discipline to capital allocation.
In March this year, Hess said it plans to full exit its downstream business and become a pure play exploration and production company.
However, Elliott has been trying to get its own slate of five director nominees to be elected to the Hess board at the annual meeting of Hess' shareholders on Thursday, May 16. Proxy advisory firms like Institutional Shareholder Services and Glass Lewis have also recommended Hess' shareholders to vote for the hedge fund's nominees.
Hess said Monday that it is prepared to add two Elliott nominees to its board if they are willing to serve along with its own nominees. These nominees will only be considered after Hess' five independent nominees are elected at the annual meeting.
Last Friday, Hess said it will separate the roles of chairman and chief executive officer immediately following its annual meeting of shareholders. Hess chairman and CEO John Hess has offered his full-support for the company's decision.
John Krenicki, former vice chairman of diversified conglomerate General Electric Co. (GE), has agreed to serve as the company's non-executive chairman, if he is elected together with the other Hess nominees.
HES closed Monday's trading at $69.39, up $0.09 on a volume of 3.43 million shares.
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