Hess (HES) shareholders have officially voted in favor of selling the company to Chevron (CVX) in a deal valued at $53 billion. However, the path to finalizing this transaction still presents several hurdles. Tortoise Portfolio Manager Thummel joins the Morning Brief to provide insights into the remaining challenges.
Thummel highlights that "the biggest hurdle" for the Chevron-Hess deal to reach full fruition is "what’s gonna be the arbitration?" He notes that if the arbitrator rules that other energy giants like Exxon (XOM) "are entitled to a right of first refusal," the deal could potentially fall through. However, he emphasizes that the "critical asset for this transaction to occur" would be the Guyana assets.
Thummel further elaborates that if Chevron were unable to acquire Hess alongside its coveted Guyana assets, the entire deal could be jeopardized. He states that Chevron "has made it very, very clear that without the Guyana asset… the company is not interested in pursuing the acquisition and the merger with Hess."
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