Is New York oil and gas company Hess Corp. (NYSE:HES) for sale?
According to a story Monday by Bloomberg News, brisk trading in Hess' options -- the highest level in four years -- is being driven by rumors that the company may be sold soon.
The article quoted analysts as saying a takeover was unlikely, especially without results from its Australian and Brazilian exploration programs, and may be fueled party by a 50% drop in the company's stock from last year's high, as happened last year when Chesapeake Energy Corp.'s shares were off 80%.
Company spokesman Jon Pepper declined to comment to The Deal on the speculation. The company's shares jumped 3.6% Monrday and were up another 2.72% in early-morning trading Tuesday.
Bond research firm
Gimme Credit LLC said in a report Monday afternoon that the ground has to be "at least marginally fertile" for this kind of seed to take root. It noted Hess' comments on its second-quarter earnings call in July that it had a strong commitment to maintain its bond ratings, including asset sales, a sale of interests in future projects and possibly equity issuance.
"While we can't know if anything special is imminent at HES [Hess], it would not surprise us to learn the company is contemplating one or more value-unlocking transactions," analyst Philip Adams wrote. Is something in the wind? More may be learned on Hess' third-quarter earnings call set for Oct. 28. -
Claire Poole
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