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Proxy Advisor Glass Lewis Urges Hess Shareholders to Accept Chevron Takeover Offer

By Gary McWilliams

HOUSTON (Reuters) – Hess shareholders are expected to vote in favor of Chevron Corp.’s $53 billion bid. at the May 28 special meeting, proxy advisor Glass Lewis said Thursday.

The terms of the proposed agreement provide a reasonable valuation and upside potential for Hess shareholders. The strategic and financial benefits of the proposed merger “are strong and reasonable, overall,” Glass Lewis said in its recommendation.

Chevron, the second-largest US oil producer, proposed last October to acquire rival Hess, aiming to gain a foothold in the lucrative offshore fields of oil-rich Guyana, where Hess has a 30% stake in a joint venture.

Hess’ partners in Guyana, Exxon Mobil Corp and CNOOC, filed arbitration proceedings in March claiming a right of first refusal over Hess’ assets in Guyana. Arbitration blocked the sale and surprised Chevron.

Proxy consulting firms have mixed recommendations. Top US advisor Institutional Shareholder Services (ISS) urged shareholders to abstain from voting on the deal and allow more time for details of the arbitration process with Exxon to be revealed.

But Pensions & Investment Research Consultants (PIRC), a London-based consultancy, has issued an opinion in favor of the merger.

(Reporting by Gary McWilliams)