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Hess (NYSE:HES) shareholders will decide on Tuesday on its plan to sell $53B to Chevron (NYSE: CVX), the vote is widely expected to be a close one as investors remain concerned about the ongoing dispute with ExxonMobil (XOM) over the Stabroek block in Guyana.
the block, where One of the largest oil discoveries in recent years, in which Hess owns a 30% stake, will secure Chevron’s (CVX) long-term oil reserves. Exxon (XOM) owns 45% of the block.
ExxonMobil (XOM) filed for arbitration challenging Hess’s (HES) proposed sale to Chevron (CVX), claiming it had a right of first refusal. Chevron and Hess disagree.
While proxy adviser Glass Lewis recommended shareholders vote in favor of the deal, Institutional Shareholder Services has told investors to abstain from voting until more details of the arbitration emerge. At least three shareholders are reportedly expected to abstain.
Susquehanna risk arbitrage analyst Frederic Boucher told the Financial Times that if the vote does not exceed the 50% threshold, Hess (HES) may postpone the May 28 vote and introduce compensation “or similar measures to overcome it” finish line.
Last week, Hess (HES) advisers seemed confident of getting enough shareholder support for the Chevron (CVX) deal.
Notably, Chevron (CVX) will hold its annual shareholder meeting on Wednesday.
