The Rising Influence of Rising Affluence

[DewDiligence]

Re: HES’ retail sale/spinoff

Technically, Hess Retail Corporation (the proposed new entity for a spinoff) filed an Information Statement on Form 10, which is not the same thing as a registration:

http://www.sec.gov/Archives/edgar/data/1593654/000119312514004668/d635235d1012b.htm
http://www.sec.gov/Archives/edgar/data/1593654/000119312514004668/d635235dex991.htm

Unlike a registration, an Information Statement can be filed with the SEC before the company in question formally exists.

A spinoff of HES’ retail business is preferable from a tax standpoint (provided that the IRS issues a favorable private letter ruling), but HES might opt to sell the retail business if they can get a good price and find a way to make the tax bite less onerous. The impetus for a sale rather than a spinoff is that a spinoff does nothing to shore up HES’ balance sheet.