Hedge fund proposes revamped Hess board to end proxy fight
(Reuters) - Hedge fund Elliott Management Corp, which has already rejected a settlement offer from Hess Corp that would have given the activist investor two seats on the oil and gas company's board, said it would be willing to settle if Hess puts all five of the Elliott-backed nominees on the board.
The hedge fund, which owns a 4.5 percent stake in Hess, said that Hess could also seat all of its own nominees on the new board as part of a settlement proposed by Elliott on Tuesday. Hess' board currently has 14 members, according to the company's website, but Elliott said the size and composition of its proposed board could be negotiated later.
Hess has been locked in a heated proxy battle with Elliott for months, with shareholders set to vote on competing slates of nominees for the company's board at its annual meeting on Thursday.
Elliott in January pitched a plan to break up Hess and launched a campaign to install the new directors. The hedge fund has said that directors are too closely tied to Chief Executive John Hess.
The company has since announced plans to exit its retail gasoline, marketing and trading businesses, and is looking to become a pure play exploration and production company.
The company also said it would strip John Hess of his chairmanship after the annual meeting, but he will remain CEO and a director.
Hess said on Monday that it was prepared to add two of Elliott's nominees, chosen in consultation with shareholders, if all of its own nominees are elected. Elliott Management called the proposal a "PR stunt.
"Shareholders want real change and a renewed board. Hess has promised such renewal and this solution will follow through on that promise," Elliott said in a statement on Tuesday.
A Hess spokesman declined to comment on the Elliott proposal.
Raymond James analyst Stacey Hudson said in an email that Elliott has now received most of its desired changes.
"We think an amicable end to the proxy fight and the merger of the nominees would represent a positive solution to what has been an increasingly personal fight," she said.
Hess shares were up 3.3 percent at $71.68 on Tuesday afternoon on the New York Stock Exchange.