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NEW YORK -- Hess Corp. continues to fight back against activist investor Elliott Management Corp. by making its case to shareholders to vote for Hess' proposed five new board of director candidates at its 2013 Annual Meeting of Shareholders to be held May 16.
Hess today sent a letter to shareholders on behalf of the candidates themselves -- John Krenicki, Kevin Myers, Fredric Reynolds, William Shrader and Mark Williams. In the letter, the candidates emphasize that they are not required to support the Hess strategic plan as a precondition for serving on the Hess board, contrary to suggestions by Elliott Management, Institutional Shareholder Services Inc. and Glass Lewis & Co.
As CSNews Online previously reported, Elliot Management owns 4.52 percent of Hess, valued at more than $1 billion. It has repeatedly stated that Hess’ stock price is considerably undervalued.
Since coming under attack by Elliot Management, most recently in a town hall meeting with shareholders, Hess has consistently reiterated that Wall Street analysts applaud its restructuring plan.
In today's letter, the Hess candidates attempt to establish a timeline of their involvement, stating that they were first approached by an independent search firm to consider serving on the Hess board; undertook a thorough evaluation of Hess' transformation strategy; met with senior management and the company's advisors; and attended board meetings under observer status.
"We did our homework," the candidates wrote. "We reviewed the Hess plan and we reviewed the Elliott plan. We reviewed independent research. We came to the conclusion -- independently and like the rest of the market -- that the best path to creating sustainable value for shareholders was to continue to pursue the transformation plan Hess has outlined to the market."
The Hess candidates argue that Elliott’s board nominees stand to be paid millions of dollars more than the Hess nominees if they are elected -- an "unusual pay package." They also make the case that the Elliott candidates endorse the broad outlines of the Hess plan, while failing to do their homework in presenting their own plan, "which has now been discredited by the market."
"We find it surprising that a proxy advisor would recommend for all of the dissident Elliott nominees, while arguing that any nominee recommended by the nominating and governing committee of a company -- a stock exchange requirement -- could somehow be rejected by the advisor on a claim of compromised independence."
The candidates emphasize that they owe nothing to Hess or to Elliott Management, but rather they believe that Hess is pursuing a plan that offers the best opportunity to maximize shareholder value.
"Make no mistake, we will not tolerate backsliding or a loss of focus," they concluded.