Hess Midstream LP Announces Pricing of Upsized Secondary Public Offering of Class A Shares

Rhea-AI Summary

Hess Midstream LP (NYSE: HESM) has announced the pricing of an upsized secondary public offering of Class A shares. The offering, initially set at 10,000,000 shares, has been increased to 11,000,000 Class A shares. These shares are being sold by an affiliate of Global Infrastructure Partners, the Selling Shareholder. The underwriter, Citigroup, has been granted a 30-day option to purchase up to 1,650,000 additional Class A shares.

HESM will not receive any proceeds from this sale. The offering is expected to close on September 20, 2024, subject to customary conditions. The shares will be offered through various channels, including the New York Stock Exchange and over-the-counter market, at market or negotiated prices.

Positive

• Upsizing of the offering from 10,000,000 to 11,000,000 Class A shares indicates strong demand
• 30-day option for underwriter to purchase additional 1,650,000 shares provides flexibility
• Multiple distribution channels (NYSE, OTC, negotiated transactions) may increase accessibility for investors

Negative

• HESM will not receive any proceeds from the sale of Class A shares
• Potential dilution of existing shareholders' ownership
• Possible downward pressure on share price due to increased supply of shares in the market

Insights

Financial Analyst

The upsized secondary offering of 11 million Class A shares by Hess Midstream LP's (HESM) major shareholder, Global Infrastructure Partners, is a significant liquidity event. This move could potentially increase HESM's free float and trading volume, which may enhance its appeal to institutional investors. However, the lack of proceeds for HESM itself suggests no immediate impact on the company's balance sheet or operations.

The offering's upsizing from 10 to 11 million shares, plus an option for 1.65 million additional shares, indicates strong market demand. This could be interpreted as a vote of confidence in HESM's current valuation and future prospects. Investors should monitor for any potential share price pressure in the short term due to increased supply, but also consider the long-term benefits of improved liquidity and broader investor base.

Market Research Analyst

This secondary offering marks a strategic move in HESM's ownership structure. Global Infrastructure Partners' decision to reduce its stake could signal a shift in the company's investor profile. The market's reaction to this offering will be important to watch, as it may indicate investor sentiment towards HESM's current valuation and growth prospects in the midstream energy sector.

The timing of this offering, amidst volatile energy markets, is noteworthy. It could reflect the major shareholder's view on HESM's peak valuation or a broader portfolio rebalancing strategy. For retail investors, this presents an opportunity to gain exposure to HESM at potentially more liquid trading levels. However, they should also consider the implications of reduced insider ownership on long-term corporate governance and strategic direction.

HOUSTON--(BUSINESS WIRE)-- Hess Midstream LP (NYSE: HESM) (“HESM”) today announced the upsizing and pricing of the previously announced underwritten public offering of an aggregate 11,000,000 Class A shares representing limited partner interests in HESM by an affiliate of Global Infrastructure Partners (the “Selling Shareholder”). The offering was upsized from the previously announced offering of 10,000,000 Class A shares. The Selling Shareholder has granted the underwriter a 30-day option to purchase up to 1,650,000 additional Class A shares.

HESM will not receive any proceeds from the sale of Class A shares in the offering. The offering is expected to close on September 20, 2024, subject to customary closing conditions.

Citigroup is acting as the bookrunning manager of the offering. The underwriter intends to offer the Class A shares from time to time for sale in one or more transactions on the New York Stock Exchange, in the over-the-counter market or through negotiated transactions at market prices or at negotiated prices.

The offering of these securities is being made only by means of the prospectus supplement and accompanying base prospectus as filed with the Securities and Exchange Commission (the “SEC”). Copies of the prospectus supplement and accompanying base prospectus relating to the offering may be obtained free of charge on the SEC’s website at www.sec.gov under HESM’s name or from Citigroup as follows:

Citigroup
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, NY 11717
Telephone: 800-831-9146

The Class A shares are being offered and will be sold pursuant to an effective shelf registration statement that was previously filed with the SEC. This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities described above, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The offering is being made only by means of a prospectus and related prospectus supplement meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

About Hess Midstream LP

HESM is a fee-based, growth-oriented midstream company that owns, operates, develops and acquires a diverse set of midstream assets to provide services to Hess Corporation and third-party customers. HESM owns oil, gas and produced water handling assets that are primarily located in the Bakken and Three Forks Shale plays in the Williston Basin area of North Dakota.

Forward Looking Statements

This press release contains “forward-looking statements” within the meaning of U.S. federal securities laws. Words such as “anticipate,” “estimate,” “expect,” “forecast,” “guidance,” “could,” “may,” “should,” “would,” “believe,” “intend,” “project,” “plan,” “predict,” “will,” “target” and similar expressions identify forward-looking statements, which are not historical in nature. Forward-looking statements are subject to certain known and unknown risks and uncertainties that could cause actual results to differ materially from our historical experience and our current projections or expectations of future results expressed or implied by these forward-looking statements. You should keep in mind the risk factors and other cautionary statements in the filings made by HESM with the SEC, which are available to the public. HESM undertakes no obligation to, and does not intend to, update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240918453020/en/

Investor Contact:

Jennifer Gordon

(212) 536-8244

Media Contact:

Lorrie Hecker

(212) 536-8250

Source: Hess Midstream LP

FAQ

How many Class A shares of HESM are being offered in the secondary public offering?

The secondary public offering of Hess Midstream LP (HESM) has been upsized to 11,000,000 Class A shares, increased from the initially announced 10,000,000 shares.

When is the expected closing date for HESM's secondary public offering?

The secondary public offering of Hess Midstream LP (HESM) is expected to close on September 20, 2024, subject to customary closing conditions.

Who is the underwriter for HESM's secondary public offering?

Citigroup is acting as the bookrunning manager for Hess Midstream LP's (HESM) secondary public offering of Class A shares.

Will HESM receive any proceeds from the secondary public offering?

No, Hess Midstream LP (HESM) will not receive any proceeds from the sale of Class A shares in this secondary public offering.