Oil and gas company Hess (NYSE: HES) has filed with the U.S. Securities and Exchange Commission for a potential spinoff of its retail unit as it moves toward becoming a strictly exploration and production company.
According to the documents filed Wednesday, Hess received approval from the Internal Revenue Service to distribute the retail business, which includes its gas stations and convenience stores, to stockholders in a tax-free spin-off. The retail network consists of more than 1,300 convenience stores and gas stations.
Simultaneous with pursuing a spinoff of the retail business, Hess Corp. will also solicit offers to purchase the entire retail business from potential buyers. Analysts said the business could be worth more than $1.5 billion.
Hess agreed to appoint three board members nominated by Singer's Elliott Management Corp. in May last year to end a four-month battle over the company's strategy. In June, Hess began the sale of its oil terminal network and divested some overseas oil and gas assets and in early July, the company tapped Goldman Sachs Group Inc. to sell its retail network. The company said in December that it had sold its commercial fuels business to Sprague Resources LP and announced asset sales had generated about $7.8 billion of after-tax proceeds in 2013.
Hess Retail is the largest operator of convenience stores along the East Coast according to The Wall Street Journal.
Shares of Hess were up about 0.41 percent to $81.19 in early trading Wednesday. They are up 46 percent over the last 12 months.
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