Hess Midstream LP Announces Secondary Public Offering of Class A Shares

Rhea-AI Summary

Hess Midstream LP (NYSE: HESM) has announced the launch of an underwritten public offering of 10,000,000 Class A shares by an affiliate of Global Infrastructure Partners. The underwriters, led by J.P. Morgan, have a 30-day option to purchase an additional 1,500,000 shares. HESM will not receive any proceeds from this sale. The shares will be offered on the NYSE, in over-the-counter markets, or through negotiated transactions. The offering is made through a prospectus and accompanying base prospectus filed with the SEC. This announcement does not constitute an offer or solicitation to buy the securities.

Positive

• The offering is managed by J.P. Morgan, a reputable firm.
• Potential for increased market visibility and liquidity for HESM shares.
• Option to purchase an additional 1,500,000 shares indicates strong market interest.

Negative

• HESM will not receive any financial proceeds from the sale.
• Potential dilution of existing shareholders' stake.
• Market reactions to secondary offerings can sometimes lead to short-term price volatility.

Insights

Financial Analyst

The secondary public offering of Class A shares by Hess Midstream LP (HESM) through an affiliate of Global Infrastructure Partners is a significant event for investors. Even though HESM will not receive proceeds from this sale, the offering still impacts the market perception of HESM's stock. When a large block of shares is introduced into the market, it can create downward pressure on the stock price in the short term due to increased supply. Retail investors should be aware that such offerings often result in temporary price volatility.

It is important to note that the offering is being managed by J.P. Morgan, a reputable financial institution, which may instill confidence in the market regarding the quality and execution of the offering. However, since the proceeds go to the Selling Shareholder and not to HESM, there is no immediate benefit to the company's balance sheet or operational capacity. Investors should look at the broader context of why this offering is occurring and what the Selling Shareholder plans to do with the proceeds, as it might signal their view on HESM's future prospects.

Furthermore, potential dilution concerns are mitigated as this is a secondary offering of existing shares rather than the issuance of new shares, thus not impacting the overall share count or ownership structure directly. For long-term investors, this offering might present a buying opportunity if the stock price dips temporarily.

Short-term: Possible stock price volatility due to increased supply.

Long-term: Neutral impact since it's a secondary offering, not issuing new shares.

Market Research Analyst

From a market perspective, this secondary offering could indicate several underlying motivations. The Selling Shareholder, Global Infrastructure Partners, might be looking to diversify their portfolio or capitalize on their investment in HESM at a potentially favorable market price. This action can be interpreted as a routine financial strategy or possibly a shift in their investment sentiment towards HESM. For retail investors, understanding the intentions behind large shareholders' moves can provide insights into market sentiment and potential future stock performance.

Given that the shares are being offered on the New York Stock Exchange and other venues, liquidity for HESM shares should remain robust. The involvement of a well-known bookrunner like J.P. Morgan also suggests that the offering is well-supported and should proceed smoothly.

Investors should monitor market reactions closely and consider whether the temporary increase in share availability aligns with their investment strategy. It's also worth noting that this event doesn't affect HESM's financial health directly, making it a less risky move for long-term holders who are focused on the company's operational performance rather than temporary market fluctuations.

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.

J.P. Morgan 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 J.P. Morgan as follows:

J.P. Morgan Securities LLC
c/o Broadridge Financial Solutions,
1155 Long Island Avenue, Edgewood, NY 11717
Email: prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com.

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/20240529618310/en/

Investor:

Jennifer Gordon

(212) 536-8244

Media:

Lorrie Hecker

(212) 536-8250

Source: Hess Midstream LP

FAQ

What is the stock symbol for Hess Midstream?

Hess Midstream's stock symbol is HESM.

When did Hess Midstream announce the secondary public offering?

Hess Midstream announced the secondary public offering on the date of the press release.

How many Class A shares are being offered by Hess Midstream?

Hess Midstream is offering 10,000,000 Class A shares.

Who is the selling shareholder in Hess Midstream's offering?

The selling shareholder is an affiliate of Global Infrastructure Partners.

Will Hess Midstream receive any proceeds from this offering?

No, Hess Midstream will not receive any proceeds from the sale of Class A shares.

Who is acting as the bookrunning manager for Hess Midstream's offering?

J.P. Morgan is acting as the bookrunning manager for the offering.

Is there an option for additional shares in Hess Midstream's offering?

Yes, there is a 30-day option to purchase up to an additional 1,500,000 Class A shares.

Where can one find the prospectus for Hess Midstream's offering?

The prospectus can be obtained from the SEC's website or from J.P. Morgan.

How will the Class A shares be sold?

The shares will be sold on the NYSE, in over-the-counter markets, or through negotiated transactions.