By Dow Jones Business News, March 06, 2013, 12:21:00 PM EDT
--Elliott Management says it has never suggested liquidating Hess
--Elliott Management alleges CEO Hess "has resorted to scare tactics"
--Relational Investors confirms it received letter released by Elliott Management
(Updates to include Relational Investors' confirmation of receiving letter in the third paragraph.)
By Melodie Warner
Elliott Management Corp. said it is surprised Hess Corp.'s ( HES ) directors would allow Chairman and Chief Executive
John Hess to seek activist investor Relational Investors LLC's help with defeating the hedge fund's efforts to replace
much of the board.
Elliott released a letter Wednesday it said was sent by Mr. Hess to Relational Investors, asking the firm to urge
Elliott to cease its attempt to liquidate the company and withdraw its board slate.
A representative for Relational Investors, which holds about a 2.7% stake in the company, confirmed it received the
letter from Mr. Hess but didn't comment further. Hess officials weren't immediately available for comment.
Elliott, which has about a 4% stake in Hess, said it has never suggested liquidating the company, and added "it is
disappointing John Hess has resorted to scare tactics."
The hedge fund is looking to fill five seats on Hess's board and has argued the company could be worth more as two
slimmer companies focused respectively on North American and international operations.
Hess disclosed Monday it is exploring options for its entire downstream business and pruning its Asian portfolio,
while also unveiling a share-buyback program of up to $4 billion and more than doubling its quarterly dividend.
It also proposed new board members, addressing concerns the company's board is too close to top management and not
experienced enough in the energy sector. Mr. Hess had said the changes announced were in the works for months, and
weren't prompted by the challenge from the activist shareholder.
Write to Melodie Warner at email@example.com
Corrections & Amplifications
This item was corrected at 1:39 p.m. EST because it misstated Relational Investors LLC's ownership stake in Hess Corp.
( HES ) in the third paragraph a 12%. Relational Investors holds a 2.7% stake in the company.
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