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Hess
Corporation
shareholders
on
Tuesday
approved
the
New
York-headquartered
oil
company’s
pending
acquisition
by
Chevron
for
$53
billion,
even
as
the
timeline
for
when
the
deal
may
close
has
become
increasingly
murky
with
the
companies
locked
in
a
dispute
with
Exxon
Mobil.
A
majority
of
outstanding
Hess
shares
voted
in
favor
of
the
merger
agreement,
though
the
company
did
not
immediately
provide
a
tally
of
the
vote.
Hess’
stock
was
little
changed
on
the
news.
“We
are
very
pleased
that
the
majority
of
our
stockholders
recognize
the
compelling
value
of
this
strategic
transaction
and
look
forward
to
the
successful
completion
of
our
merger
with
Chevron,”
CEO
John
Hess
said.
But
the
pending
deal
is
in
potential
jeopardy
amid
Exxon’s
claim
to
a
right
of
first
refusal
over
Hess’
assets
in
Guyana
under
a
joint
operating
agreement
that
governs
a
massive
offshore
oil
patch
called
the
Stabroek
Block.
Hess
has
a
30%
stake
in
the
Stabroek
Block,
while
Exxon
leads
the
development
with
a
45%
stake.
China
National
Offshore
Oil
Corp.
holds
the
remaining
25%.
Exxon
filed
for
arbitration
in
March
to
defend
the
rights
it
claims
under
the
joint
operating
agreement.
Chevron
and
Hess
have
told
investors
the
pending
deal
would
terminate
if
Exxon
prevails.
Hess
Corp.
said
Tuesday
that
the
deal’s
completion
depends
on
the
resolution
of
the
arbitration
proceedings.
The
companies
are
working
to
complete
the
merger
“as
soon
as
practicable,”
according
to
Hess.
Ahead
of
the
vote,
Hess
shares
were
trading
at
around
$152,
which
means
the
deal
spread
has
widened
since
when
the
transaction
was
announced.
That
suggests
some
investors
fear
the
agreement
is
at
risk.
Chevron
has
repeatedly
maintained
that
the
Exxon’s
claims
under
the
joint
operating
agreement
do
not
apply
to
its
acquisition
of
Hess.
“We
are
confident
our
position
on
the
preemption
right
will
be
affirmed
in
arbitration
and
are
working
to
advance
the
process
on
this
straightforward
matter,”
said
Chevron
spokesperson
Bill
Turenne
in
a
statement
Tuesday.
“We
look
forward
to
completing
the
transaction
and
welcoming
Hess
to
our
company.”
But
Exxon
CEO
Darren
Woods
has
said
his
company
is
in
a
good
position
to
prevail
in
arbitration,
telling
CNBC
in
April
that
the
oil
major
wrote
the
agreement.
The
Chevron-Hess
deal
was
originally
slated
to
close
in
the
first
half
of
2024,
but
that
timeline
has
been
delayed
due
to
the
Exxon
factor.
Chevron
CEO
Mike
Wirth
told
analysts
on
a
conference
call
last
month
that
Hess
has
asked
the
arbitration
court
to
issue
a
ruling
in
the
fourth
quarter,
which
should
allow
the
companies
“to
close
the
transaction
shortly
thereafter.”
Woods
told
CNBC
in
April
that
he
expects
arbitration
to
drag
into
2025.
The
CEO
has
said
Exxon
does
not
intend
to
make
a
bid
for
Hess.
Exxon
is
seeking
to
confirm
its
rights
under
the
joint
operating
agreement
and
find
out
the
value
placed
on
Hess’
Guyana
assets
under
the
deal,
Woods
said.
If
Exxon
prevails
and
the
Chevron-Hess
deal
terminates,
Hess
would
remain
a
stand-alone
company
and
maintain
its
stake
in
the
Stabroek
Block.
The
Chevron-Hess
pact
is
also
facing
scrutiny
from
the
Federal
Trade
Commission.
Turenne
said
Chevron
expects
to
the
FTC
review
to
move
toward
a
conclusion
in
the
coming
weeks.
Institutional
Shareholder
Services
had
called
for
Hess
shareholders
to
abstain
from
the
vote
on
the
merger
agreement
to
allow
for
more
details
to
emerge
on
how
long
the
arbitration
process
will
take.
ISS
said
Chevron
and
Hess
did
not
promptly
notify
shareholders
of
the
risk
posed
by
the
joint
operating
agreement,
waiting
months
after
the
deal
was
announced.
Hess
shareholders
would
bear
the
risk
if
the
deal
terminates
because
Chevron
is
not
obligated
to
pay
a
termination
fee,
according
to
ISS.
Shareholders
would
also
not
be
entitled
to
Chevron’s
dividend
during
the
arbitration
process,
according
to
ISS.
The
dividend
was
touted
by
Hess
as
one
of
the
main
benefits
of
the
merger,
according
to
ISS.
Glass
Lewis,
on
the
other
hand,
recommended
that
shareholders
vote
in
favor
of
the
deal.
The
firm
acknowledged
that
the
dispute
with
Exxon
has
created
uncertainty,
but
said
“the
strategic
and
financial
merits
of
the
proposed
merger
are
sound
and
reasonable,
on
balance.”
