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

By Gary McWilliams

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

The terms of the proposed agreement provide a reasonable valuation and offer potential upside to Hess shareholders. The strategic and financial merits of the proposed merger “are sound and reasonable overall,” Glass Lewis said in his recommendation.

The second-largest US oil producer, Chevron, last October offered to acquire rival Hess in a bid to gain a foothold in Guyana’s lucrative oil-rich offshore fields, where Hess holds a 30% stake. in a joint venture.

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

Proxy consulting firms split recommendations. Top US adviser Institutional Shareholder Services (ISS) urged shareholders to refrain from voting on the deal and to allow more time for details about the arbitration process with Exxon to emerge.

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

(Reporting by Gary McWilliams)