Hess Corporation on Monday announced its plans to sell its retail, refining, and processing businesses to focus more on exploration and production
, leaving some loyal Hess toy truck collectors worried.
It's assumed that the shutdown of the company's retail arm will affect the popular collectibles Hess has been rolling out every holiday season since 1964.
John Hess, chairman and CEO, announced the upcoming changes on Monday.
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"Our Board and management team have been pursuing a multi-year strategy to transform Hess into a focused E&P company," Hess said. "The initiatives announced today represent the culmination of this process. By 2014, Hess will be a pure play E&P company with a tremendous portfolio comprised of higher growth, lower risk assets. We believe we will have the financial flexibility to pursue this growth at the same time that we increase current returns to shareholders and generate significant future value."
The moves come after a much-publicized struggle with Elliott Management, the investment firm that has been pressuring Hess to break up the company.
In January, Elliott head Paul E. Singer called for a Hess board shakeup, urging investors to vote for a new lineup of five independent directors. Hess shares reportedly jumped more than 10 percent after news of the Elliott overhaul broke. Elliott owns a 4 percent stake in Hess.
"If managed appropriately, we believe the equity value of Hess could be up to $126 per share–a massive premium to where the shares currently trade in the market," Elliott wrote in a January letter to Hess shareholders. "But reclaiming this shareholder value requires substantial strategic change."
John Hess denies that the planned changes are in response to Elliott's pushing.
"Elliott got on the train after it left the station," Hess told the New York Times.
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In a letter to investors Monday, Hess named its new board members and further detailed the plan to dump downstream assets, including the previously announced sale of its network of oil terminals
. The company's holdings in Indonesia and Thailand are also slated for sale. The proceeds will reportedly go toward raising Hess' dividend to $1 from 40 cents.
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