(Bloomberg) — Chevron Corp.’s $53 billion proposed takeover of Hess Corp. suffered one other setback as an arbitration hearing to settle an ownership dispute with Exxon Mobil Corp. won’t be held until next 12 months.
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The international arbitration panel handling Exxon’s claim that Chevron’s acquisition doesn’t give it the suitable to control Hess’ stake in a Guyanese oil project has scheduled the hearing for May, the companies said Wednesday.
“Hess and Chevron had expected and requested that this hearing be held earlier,” the companies said in a joint statement. “Nonetheless the arbitrators’ common schedules didn’t make this possible.”
The delay is a serious blow to the embattled deal, which stays faraway from completion greater than nine months after it was announced. It stays to be under review by the US Federal Trade Commission, which plans to delay its decision whether to try and block the merger until after the arbitration case is settled.
Hess shares fell as much as 3.5% after the close of normal trading in Latest York. Chevron dipped as much as 1.7%.
Chevron announced its agreement to buy Hess in October, marking what could possibly be the company’s biggest takeover in twenty years. The centerpiece was Hess’s 30% stake in an unlimited Guyanese oil field controlled by Exxon, the largest oil discovery of the past decade.
Exxon operates the block and owns a 45% stake. Hess and China’s Cnooc Ltd. own the remaining 30% and 25%, respectively. Chevron has said it could scrap your entire deal to buy Hess if the company’s stake was not included throughout the transaction.
Exxon dealt the merger a body blow in March when it filed for arbitration, claiming it has a right of first refusal over Hess’ stake.
Hess investors approved the Chevron takeover in May by just 51% after several large shareholders and Institutional Shareholder Services Inc. argued the vote have to be delayed until after the arbitration case. The investors expressed concern that they’d not receive Chevron dividends until the deal is complete, eroding the price of the transaction.
Chevron has said it’s confident it will prevail in arbitration.
“The views of Chevron and Hess on the merits remain unchanged,” the companies said Wednesday. “Exxon and Cnooc proceed to disregard the plain language of the operating agreement, and Chevron and Hess remain confident.”
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