NEW YORK - Advisory firm Glass, Lewis & Co. has recommended that shareholders of Hess Corporation (NYSE: NYSE:HES) vote in favor of the proposed all-stock merger with Chevron (NYSE:CVX), citing the deal's strategic and financial benefits. The endorsement follows the Hess Board of Directors' unanimous recommendation for the merger.
The transaction is expected to grant Hess shareholders approximately 15% ownership in the combined entity, which is touted to become a premier supermajor with a robust portfolio. The merger promises to deliver nearly nine times the current cash returns to Hess shareholders through dividends and share repurchases upon closing.
In addition to financial incentives, the merger is designed to offer Hess shareholders greater asset and geographic diversification, access to Chevron’s stronger balance sheet, operational and cost synergies, and expanded global partnerships. The all-stock nature of the deal allows Hess shareholders to continue benefiting from Chevron's anticipated free cash flow growth.
CEO John Hess expressed confidence that the merger represents the "best, most accretive value option" for shareholders and anticipates the successful completion of the merger. Shareholders with questions about voting are directed to contact Hess’s proxy solicitor, MacKenzie Partners, Inc.
The proposed transaction has undergone regulatory processes, with Chevron having filed a registration statement and prospectus with the SEC on April 26, 2024, and Hess having filed a definitive proxy statement on the same date. The mailing of the definitive proxy statement to Hess stockholders commenced around April 26, 2024.
This article is based on a press release statement from Hess Corporation.
InvestingPro Insights
In light of the recommended merger between Hess Corporation (NYSE: HES) and Chevron, investors are closely monitoring Hess's market position and financial health. According to InvestingPro, Hess is currently trading at a high Price / Book multiple of 4.92, which is reflective of the market's valuation of the company's assets relative to its share price. Moreover, the company's Price / Earnings (P/E) Ratio stands at 24.09, with a slight adjustment to 23.59 for the last twelve months as of Q1 2024, indicating how much investors are willing to pay for a dollar of earnings. This can be a critical factor for shareholders considering the merger's potential to enhance earnings.
InvestingPro Tips reveal that Hess has been profitable over the last twelve months and analysts predict the company will remain profitable this year. These insights could provide confidence to shareholders about the long-term value of the merger with Chevron. Additionally, Hess has a record of 38 consecutive years of dividend payments, a testament to its financial stability and commitment to returning value to shareholders. This track record may be particularly attractive to investors looking for consistent income, especially when combined with the prospect of increased cash returns post-merger.
With these financial metrics in mind, Hess's stock also demonstrates low price volatility, which could be a reassuring sign for investors amidst the significant changes that a merger entails. For those interested in further analysis and additional InvestingPro Tips, there are 9 more tips available on the InvestingPro platform. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which could provide valuable insights during this transformative period for Hess Corporation.
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