Kinetik Announces Pricing of Secondary Offering of Common Stock
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Insights
From a financial perspective, the secondary offering of 11,373,801 shares by Apache Midstream LLC, a subsidiary of Apache Corporation, is a significant liquidity event that merits attention. At a price of $33.75 per share, the offering represents a substantial capitalization event for the Selling Stockholder. It is noteworthy that Kinetik Holdings Inc. will not receive any proceeds from this transaction, which implies that the company's capital structure and operating funds remain unaffected. However, investors should consider the potential dilutive effect of the additional 1,706,070 shares that may be purchased by the underwriters within the 30-day option period.
Furthermore, the CEO's decision to purchase 14,814 shares at the public offering price could be interpreted as a signal of confidence in the company's future prospects. This action may influence investor sentiment and potentially affect the stock's performance in the short term. The involvement of prominent financial institutions as book-running managers and co-managers indicates a high level of interest and confidence in the offering, which could have positive implications for the stock's liquidity and future price stability.
Examining the market implications, the secondary offering by Kinetik Holdings Inc. is indicative of Apache Midstream's strategic financial management, potentially aimed at reallocating capital within its portfolio or realizing gains from its investment in Kinetik. This move may signal to the market Apache's assessment of Kinetik's valuation or a shift in Apache's investment strategy.
For Kinetik, the offering could have various market implications. While the company's equity base is expanding, the sale does not directly benefit Kinetik's financial position since the proceeds do not go to the company. Market response to such offerings can be mixed, as existing shareholders may be concerned about the dilution of their shares, while potential investors might see an opportunity to invest in the company at a set price. The CEO's share purchase can be seen as a commitment to the company's performance and may mitigate some dilution concerns.
Legally, the secondary offering is conducted under a registration statement that became effective upon filing, which suggests compliance with the Securities and Exchange Commission (SEC) regulations. The preliminary prospectus supplement provides essential details about the offering and must be scrutinized for legal accuracy and completeness. It is essential for potential investors to review these documents thoroughly to understand the terms of the offering and the risks involved.
The legal framework governing such transactions is designed to protect investors by ensuring transparency and the provision of all material information. The role of the underwriters is also critical as they are responsible for the distribution of shares and must adhere to both regulatory requirements and due diligence processes to ensure the success of the offering.
In connection with the Offering, the Company’s Chief Executive Officer has agreed to purchase an aggregate of 14,814 shares of Class A common stock from the underwriters at the public offering price.
Goldman Sachs & Co. LLC, BofA Securities, J.P. Morgan and Mizuho are acting as joint lead book-running managers for the Offering. Citigroup, HSBC, Morgan Stanley, MUFG, Scotiabank, Truist Securities, Barclays, RBC Capital Markets and TD Securities are acting as joint book-running managers for the Offering. Capital One Securities, PNC Capital Markets LLC, Raymond James and Regions Securities LLC are acting as co-managers for the Offering.
The Offering is being made only by means of a prospectus supplement. When available, a copy of the prospectus supplement and the accompanying base prospectuses may be obtained from Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street,
The offering is being conducted pursuant to a registration statement, filed with the SEC on March 13, 2024, that became automatically effective upon filing, and corresponding prospectus included therein. A preliminary prospectus supplement thereto was filed with the SEC. Before investing, prospective investors should read the prospectus supplement, accompanying base prospectus and the documents incorporated by reference therein for more complete information about the Company and the Offering. An electronic copy of the prospectus supplement and accompanying base prospectus is available from the
This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Kinetik Holdings Inc.
Kinetik is a fully integrated, pure-play, Permian-to-Gulf Coast midstream C-corporation operating in the
Forward-looking statements
This news release includes certain statements that may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “seeks,” “possible,” “potential,” “predict,” “project,” “prospects,” “guidance,” “outlook,” “should,” “would,” “will,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These statements include, but are not limited to, statements regarding the Offering. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development, or otherwise, except as may be required by law.
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Kinetik Investors:
(713) 487-4832 Maddie Wagner
(713) 574-4743 Alex Durkee
Source: Kinetik Holdings Inc.
FAQ
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