Proxy Adviser Glass Lewis Urges Hess Shareholders Accept Chevron Takeover Offer

The proposed deal terms provides a reasonable valuation and offers the potential for upside to Hess shareholders. The strategic and financial merits of the proposed merger “are sound and reasonable, on balance,” Glass Lewis said in its recommendation.

No. 2 U.S. oil producer Chevron last October offered to acquire rival Hess in a move to gain a foothold in oil-rich Guyana’s lucrative offshore fields, where Hess holds a 30% stake in a joint venture.

Hess’ partners in Guyana, Exxon Mobil Corp and CNOOC, in March filed an arbitration case claiming a right of first refusal over Hess’s Guyana assets. The arbitration has stalled the sale and surprised Chevron.

Proxy advisory firms have split recommendations. Top U.S. advisor Institutional Shareholder Services (ISS) urged shareholders abstain from voting on the deal and allow more time for details on the arbitration process with Exxon to emerge.

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

(Reporting by Gary McWilliams)