Chevron says it's confident about merger after buying 5% of Hess shares

Chevron said it had bought 4.99% of Hess Corp common shares in this year. This shows its confidence that the planned acquisition will be completed, according to a filing made by the oil giant on Monday.

In October 2023, the second largest U.S. oil company agreed to purchase Hess for $53 billion in an all stock deal to acquire a key stake in Guyana’s oil-rich Stabroek Block.

Exxon Mobil, Hess’ partners in Guyana and the U.S. regulators have both approved of the deal. However, they have filed a lawsuit to challenge it. The case will be heard by a three-judge arbitral panel later in May.

Chevron bought 15,380,000 Hess share between January and March. This is worth $2.3 billion, based on the closing price of Hess at $150.45 per share on Monday.

Chevron is offering 1.025 shares of its stock for every Hess share. Hess shareholders would receive $162.69 per share if the deal was closed on Monday based on Chevron closing price of $158,72.

Chevron saves money by purchasing at a discounted price, according to Roy Behren. He is the co-president of Westchester Capital Management and is also an investor in Hess.

It's a clever and savvy move from their side.

Behren believes that the deal will be finalized. Chevron, with its 5% stake in Hess, has an indirect interest of $2.3 billion in the Stabroek oil field, even if the acquisition fails.

(source: Reuters)