Hess, under pressure, to exit retail business
NEW YORK (AP) — Hess is getting out of the gas station business and ridding itself of its energy trading and marketing businesses, as it shifts its focus further into exploration and production.
The company will also nominate a slate of six independent directors to its board, replacing six that already hold seats.
The announcement arrives about a month after the hedge fund Elliott Management, one of the company's largest shareholders, accused the board of "poor oversight," and said that the company's management was responsible for more than a "decade of failures."
Elliott, which holds a 4 percent stake in Hess Corp., is pushing to seat five outsiders on the board.
But Hess rejected Elliott's nominees in a letter to shareholders Monday, accusing the firm of trying to disrupt progress it has already made in reshaping itself. It said that Elliott hasn't taken into account how much company shares have risen since it began to shed previous business models.
Hess said the nominees chosen by Elliott would effectively dismantle the company.
Elliott released a statement later Monday saying that while Hess' moves incorporate parts of its suggestions, they "fall dramatically short of what's needed." It touted its own slate of five board nominees, which include four with energy industry experience, and questioned the independence of Hess' slate, noting that one of the nominees has ties to the Hess family.
Hess shares fell sharply after the recession, as did shares of most energy companies, but the stock began to rebound last summer and on Monday, they hit their highest level almost two years.
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