Sometimes, shareholder activism can produce real change at a company. A perfect example of that has been Hess (HES).
After a recent tussle with activist hedge fund Elliott Management — who accused the board of “poor oversight” and being responsible for more than a “decade of failures” — Hess has unveiled a series of transitional events to reshape the integrated firm into a pure E&P operator.
So far, the firm has sold more than $3 billion in assets — including Russian holdings, offshore fields in the North Sea and Eagle Ford assets in Texas. Still on the chopping block are the company’s downstream businesses and interests, consisting of terminal, retail and trading operations. The 19 terminals along the East Coast plus the two terminals in the Caribbean currently store about 52 million barrels of crude oil and are estimated to be worth around $1 billion.
Investors certainly like Hess’ moves … not to mention its 43% YTD climb and a dividend that will jump 150% to 25 cents quarterly by year’s end.