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Elliott Offers Response to Letter from Hess CEO, Calls Letter 'Scare Tactic'

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Elliott Management Corporation (“Elliott”) today responded to the letter sent by John Hess, chairman and CEO of Hess Corporation (NYSE: HES), to David Batchelder of Relational Investors, LLC with the following comments:

“We were disappointed to see John Hess's letter to fellow shareholder David Batchelder. The letter relays the attitude of a CEO that has never been held accountable. We are surprised the Board would allow such communication:

* Elliott has never suggested liquidating the company, and it is disappointing John Hess has resorted to scare tactics. * By underperforming peers by 460%, John Hess has been in the process of damaging the company through 17 years of poor management. * Monday, John Hess announced nominees who are up for election in May but at the same time he called their independence into question when he announced that these nominees had rubber stamped his plan. At a time when the company sorely needs directors who will act independently in the best interest of shareholders, one has to question this rush to judgment. * Hess claims they started looking for new directors in August 2012. But it was in August 2012 that Hess added Sam Nunn—a former elected legislator with no oil & gas experience and questionable independence. And just this Monday they announce his retirement? John Hess's statements are difficult to believe and raise concerns about his credibility and accountability. * Hess's efforts Monday reflected haste, poor judgment, and lack of analysis.

* Only two of the nominees have E&P operating experience * Only two have restructuring experience * None have experience in developing unconventional resources * None have experience monetizing midstream assets

* Elliott's nominees are truly independent and better qualified:

* 4 have E&P operating experience * 4 have restructuring experience * 2 have experience in developing unconventional resources * 2 have experience monetizing midstream assets

It is time for accountability at Hess.”

The following letter was sent by John Hess to David Batchelder of Relational Investors, LLC on Tuesday, March 5, 2013:

“Dear David,

I am pleased that you approve of our adding new directors. Our strategy is consistent with our discussions with you in the meetings we had in December and January. However, we do not agree that Elliott's nominees would be helpful in executing our well received announcements regarding our strategy.

We trust you will continue to recognize that Hess is aggressively pursuing the right strategy to deliver shareholder value. We also expect that you would recognize that we have added a truly superior slate of directors.

We have never sought a proxy fight. We hope that you will urge Elliott to cease its attempt to liquidate the company and deprive shareholders of significant value. We also encourage you to urge Elliott to withdraw its inferior slate of candidates tethered to Elliott's flawed strategy.

Sincerely,

John B. Hess

cc: Samuel W. Bodman Ill Nicholas F. Brady Gregory P. Hill Edith E. Holiday Thomas H. Kean Craig G. Matthews Risa Lavizzo-Mourey John H. Mullin Ill Samuel A. Nunn Frank A. Olson Ernst H. von Metzsch F. Borden Walker Robert N. Wilson”

Posted-In: News

 

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