UPDATE 1-Hess to exit businesses; focus on oil, gas exploration
* Exiting retail, energy marketing and energy trading businesses
* Raises dividend to $1 from 40 cents
* To buy back up to $4 billion of stock
* Names six independent directors
* Shares up 4 percent in premarket trade
March 4 (Reuters) - Oil and gas company Hess Corp will exit its retail, energy marketing, and energy trading businesses following pressure from an activist investor to break up the company.
The company also said it would buy back up to $4 billion of its stock and increase its annual dividend to $1 from 40 cents, beginning July.
Hess shares rose 4 percent before the bell.
Hedge fund Elliott Management has asked the company, which is looking to become a predominantly exploration and production company, to consider a spinoff of its U.S. onshore assets and the sale of its retail operations.
Paul Singer's Elliott Management, the third-largest Hess shareholder with a 4 percent stake, also plans to nominate five directors at the company's annual meeting in May.
"We are convinced that our transformation is driving superior value creation far beyond Singer's short-term time horizon," Hess said in a letter to shareholders on Monday, while naming six independent directors.
Hess has been looking to sell non-core assets - including an exit from the refining business - and pour more than 90 percent of its capital into exploration and production.
ConocoPhillips, Marathon Oil Corp and Murphy Oil have all separated their refining operations to create additional value.
Hess on Monday also said it would prune its Asian portfolio by divesting operations in Indonesia and Thailand to focus on the North Malay basin and a joint development area in Malaysia and Thailand.
The company is pursuing monetization of its oil and gas gathering and transportation assets in North Dakota's Bakken shale field, expected in 2015.
Hess will use proceeds from the asset sales to pay down short-term debt. The company had short-term debt of $787 million as of Dec.31, according to Thomson Reuters data.
The company's marketing operations, which consist mainly of retail gasoline and energy marketing activities, generated earnings of $209 million in 2012. The company's net income for the year was $2.25 billion.
Hess operates terminals and retail gasoline stations, most of which include convenience stores, that are located on the East Coast of the United States.
It sells refined petroleum products, natural gas and electricity to commercial and industrial businesses through its energy marketing activities.
The company's energy trading business is a New York-based joint venture known commonly as Hetco, in which Hess holds a 50 percent stake. Two top Goldman Sachs traders hold the remaining stake.
Hess shares closed at $66.54 on the New York Stock Exchange on Friday.