Hess Midstream LP Announces Secondary Public Offering of Class A Shares

Rhea-AI Summary

Hess Midstream LP (NYSE: HESM) has announced an underwritten public offering of 10,000,000 Class A shares by an affiliate of Global Infrastructure Partners. The Selling Shareholder plans to grant the underwriters a 30-day option to purchase up to 1,500,000 additional shares. HESM will not receive any proceeds from the sale. Citigroup is the bookrunning manager of the offering. The offering is being made through a prospectus supplement and accompanying base prospectus filed with the SEC.

Insights

Financial Analyst

The announcement of a significant underwritten public offering by Hess Midstream LP (HESM) represents a notable event for investors and market participants. The sale of 10,000,000 Class A shares by an affiliate of Global Infrastructure Partners could indicate a realignment of investment strategy or portfolio management by the selling shareholder. Given that the proceeds of the sale do not benefit HESM directly, the impact on the company's immediate financials may be limited. However, the market's reaction to such a large offering could affect HESM's stock price, as it may be perceived as a signal regarding the future confidence of major investors in the company's performance.

Moreover, the potential additional sale of 1,500,000 shares under the underwriters' option could lead to further dilution of the stock, which typically exerts downward pressure on the share price. Investors should monitor the transaction's execution, including the final sale price relative to the market price, as it can provide insights into institutional sentiment towards HESM. The involvement of a reputable financial institution like Citigroup as the bookrunning manager suggests a level of credibility to the offering, which may help in achieving optimal pricing for the selling shareholder.

Market Research Analyst

From a market dynamics perspective, the offering by Hess Midstream LP's affiliate is an event that could influence perceptions of the midstream oil and gas sector's attractiveness. The sector, which deals with the transportation, storage and wholesale marketing of crude oil, natural gas and natural gas liquids, is sensitive to changes in energy prices and regulatory environments. If the offering is executed successfully, it could signal robust market liquidity and investor appetite for midstream assets, potentially encouraging similar transactions in the industry.

It's also important to consider the context of the offering in relation to industry trends. For instance, if the sector is experiencing consolidation, the sale might be part of broader strategic moves within the industry. Conversely, if the sector is expanding, the offering could be a precursor to more significant capital reallocation. Stakeholders should assess the offering against the backdrop of current midstream market conditions and broader economic indicators to gauge its potential impact on the sector.

Legal Expert

From a legal standpoint, the transaction's adherence to the Securities Act of 1933 is crucial. The offering is being made under an effective shelf registration statement previously filed with the SEC, which allows for a more streamlined process for the registered securities to be sold over time. The prospectus supplement and accompanying base prospectus will provide detailed information about the offering, which is essential for investors to make informed decisions. Compliance with SEC regulations, including the provision of a prospectus meeting the requirements of Section 10, is a fundamental aspect of such offerings, ensuring transparency and protecting investor interests.

Furthermore, the stipulation that the offering will not constitute a sale in any jurisdiction where it would be unlawful prior to registration or qualification under the applicable securities laws underscores the legal complexities of transacting securities across different states and jurisdictions. Investors should be aware of the legal framework governing the offering to understand the conditions under which the shares are being sold.

HOUSTON--(BUSINESS WIRE)-- Hess Midstream LP (NYSE: HESM) (“HESM”) today announced the commencement of an underwritten public offering of an aggregate of 10,000,000 Class A shares representing limited partner interests in HESM by an affiliate of Global Infrastructure Partners (the “Selling Shareholder”). The Selling Shareholder intends to grant the underwriters a 30-day option to purchase up to 1,500,000 additional Class A shares. HESM will not receive any proceeds from the sale of Class A shares in the offering.

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 preliminary 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/20240205386495/en/

Investors:

Jennifer Gordon

(212) 536-8244

Media:

Lorrie Hecker

(212) 536-8250

Source: Hess Midstream LP

FAQ

What is the ticker symbol for Hess Midstream LP?

The ticker symbol for Hess Midstream LP is HESM.

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

An aggregate of 10,000,000 Class A shares are being offered in the public offering.

Who is the bookrunning manager of the offering?

Citigroup is acting as the bookrunning manager of the offering.

Will HESM receive any proceeds from the sale of Class A shares in the offering?

HESM will not receive any proceeds from the sale of Class A shares in the offering.

Where can the preliminary prospectus supplement and accompanying base prospectus be obtained?

Copies of the preliminary 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.