(Bloomberg) — Leon Hess founded Hess Corp. with a secondhand truck delivering fuel oil during the depression. Ninety years later, his son, John Hess, has agreed to sell the US oil producer to Chevron Corp. in a deal that crystallizes the value of the stake controlled by the family at about $5 billion.
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The Hess chief executive officer’s stake in the company, together with the stock held by family members and trusts, total 29.2 million shares, according to the latest proxy filing. Of those, more than 25 million are related to trusts, the Hess Foundation, a limited partnership and limited liability companies, meaning many of the shares may not be beneficially owned by the family. Chevron on Monday agreed to acquire Hess in an all-stock transaction that values the oil independent at $171 per share.
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John Hess, 69, who has been chief executive officer of Hess since 1995, is expected to take a seat on the Chevron board following the completion of the deal. He said on a conference call following the announcement of the takeover that he has no plans to sell down his family’s stake, which will rank among the very largest holders of Chevron.
“We still get to participate in the upside,” Hess said on a call with analysts Monday. “This value accretion will go to Chevron shareholders of which I and my family are going to be one, and intend on holding the stock for a long time.”
Hess shareholders will receive $6.50 a share in dividends next year after the deal closes, up from $1.75 currently.
–With assistance from Tom Maloney.
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