Hess Midstream LP Announces Secondary Public Offering of Class A Shares

Rhea-AI Summary

Hess Midstream LP (NYSE: HESM) has announced a secondary public offering of 10,000,000 Class A shares by an affiliate of Global Infrastructure Partners. The underwriter, Citigroup, may purchase up to 1,500,000 additional shares within 30 days. HESM will not receive proceeds from this sale. The shares will be offered on the New York Stock Exchange and over-the-counter markets at market or negotiated prices. This offering is made through a prospectus supplement and base prospectus filed with the SEC. The sale is pursuant to an effective shelf registration statement previously filed with the SEC.

Positive

• Potential for increased liquidity in HESM shares due to larger public float
• No dilution for existing shareholders as HESM is not issuing new shares

Negative

• Large shareholder (Global Infrastructure Partners affiliate) reducing stake
• Potential downward pressure on share price due to increased supply

Insights

Financial Analyst

The secondary public offering of 10 million Class A shares by Hess Midstream LP's (HESM) major shareholder, Global Infrastructure Partners, is a significant market move. This offering, with a potential additional 1.5 million shares, could increase the stock's float and liquidity. However, it's important to note that HESM won't receive any proceeds from this sale.

For investors, this could be seen as a mixed signal. While increased liquidity is generally positive, a large shareholder reducing their stake might raise questions about the company's future prospects. The market's reaction to this news will be important to watch, as it could impact HESM's stock price and investor sentiment in the short term.

Long-term implications depend on how the market absorbs these additional shares and whether it affects HESM's ownership structure significantly. Investors should monitor any changes in the company's strategic direction or governance following this offering.

Market Research Analyst

This secondary offering by Global Infrastructure Partners could potentially reshape HESM's shareholder structure. With up to 11.5 million shares hitting the market, we might see a shift in ownership dynamics and possibly increased institutional investor interest due to improved liquidity.

The timing of this offering is intriguing. Investors should consider whether this move is driven by Global Infrastructure Partners' portfolio rebalancing or if it reflects their view on HESM's valuation and future prospects. It's important to analyze recent midstream sector trends and HESM's operational performance to contextualize this decision.

Moreover, the market's absorption capacity for these shares will be a key factor to watch. A smooth placement could indicate strong demand and confidence in HESM, while any difficulties could put downward pressure on the stock price. This offering might also impact HESM's weighting in relevant indices, potentially affecting passive investment flows.

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/20240918881521/en/

Investors:

Jennifer Gordon

(212) 536-8244

Media:

Lorrie Hecker

(212) 536-8250

Source: Hess Midstream LP

FAQ

How many Class A shares of Hess Midstream LP (HESM) are being offered in the secondary public offering?

An affiliate of Global Infrastructure Partners is offering 10,000,000 Class A shares of Hess Midstream LP (HESM), with an option for underwriters to purchase up to 1,500,000 additional shares within 30 days.

Will Hess Midstream LP (HESM) receive any proceeds from this secondary offering?

No, Hess Midstream LP (HESM) will not receive any proceeds from the sale of Class A shares in this secondary offering. The proceeds will go to the selling shareholder, an affiliate of Global Infrastructure Partners.

Who is the underwriter for Hess Midstream LP's (HESM) secondary public offering?

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

Where will the Class A shares of Hess Midstream LP (HESM) be offered for sale?

The Class A shares of Hess Midstream LP (HESM) will be offered for sale on the New York Stock Exchange, in the over-the-counter market, or through negotiated transactions at market prices or negotiated prices.