The Morning Brief: Hess to Unload Samara-Nafta as Concession to Elliott Management

It looks like Elliott Management is getting its way. Hess announced Monday it plans to sell its Russian subsidiary Samara-Nafta to OAO Lukoil for $2.05 billion. Based on its 90 percent interest, total after-tax proceeds are expected to top $1.8 billion. The oil giant said that so far this year it has announced or completed the sale of its interests in the Beryl field in the U.K. North Sea, the Eagle Ford play in Texas, and the Azeri, Chirag and Guneshli fields in Azerbaijan and the associated pipeline. Total net proceeds from these sales, Including Samara-Nafta, will come to $3.4 billion. Paul Singer’s Elliott Management, is currently engaged in a proxy fight with Hess. Last month the hedge fund, which said it owned 4.3 percent of Hess, created a website to make its case for a wide range of changes at the company. It argued in a 71-page presentation the intrinsic value of Hess is closer to $128 per share compared to its then closing price of $71.69. The stock Monday climbed nearly 3 percent, to close at $73.54.

E*Trade Financial reported that in March Kenneth Griffin’s Citadel sold about 27.4 million shares of E*Trade stock for total proceeds of about $309 million. After the sale, Citadel owned less than 0.1 percent of the company’s stock and no debt securities. On March 21, Griffin also told the company he did not want to stand for reelection to the company’s board. Citadel invested $2.6 billion in the brokerage firm in 2007, which at the time was said to be close to bankruptcy, one of many casualties of the maniacal mortgage market. According to earlier reports, Citadel, which also invested in 12.5 percent senior notes, made more than $800 million in its investment in E*Trade. Shares dropped 3 percent on Monday, to close at $10.39. The stock is down about 5 percent from its March high.

Tsukasa Shimoda, a former money manager at Morgan Stanley Asset and Investment Management, has launched a Japanese-focused long-short hedge fund. Shimoda, the founder and president of Galleyla Investment, has established the UMJ Galleyla Fund with hopes of raising as much as 20 billion yen, or $213 million.

SAC Capital’s Steven Cohen has gone shopping again. This time he’s off to the supermarket. He disclosed Monday his firm owns 5.1 percent of discount grocery chain Supervalu, which last week announced it will fire 1,100 workers. SuperValue stock, which closed down 3.17 percent on Monday, has dropped more than 34 percent in the past year.

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