Elliott Management Corp. said it’s not trying to liquidate Hess Corp. (HES:US) and the New York-based oil company is using “scare tactics” to convince shareholders to support its proposed slate of directors.
John Hess, the company’s chairman and chief executive officer, wrote in a letter to Relational Investors LLC yesterday that Elliott Management was trying to liquidate Hess, a statement the New York hedge fund disputed in an e-mail today.
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 percent 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 today. Jon Pepper, a Hess spokesman, confirmed the Relational letter in an e-mail.
Relational Investors, which holds 2.7 percent 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, said in a telephone interview today.
“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.”
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