UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Item 1.01. Entry into a Material Definitive Agreement.
Unit Repurchase Agreement
On May 5, 2025, Hess Midstream LP, a Delaware limited partnership (the “Company”), Hess Midstream Operations LP, a Delaware limited partnership and a subsidiary of the Company that holds all of the Company’s operating assets (“HESM OpCo” and, together with the Company, the “Partnership Entities”), Hess Investments North Dakota LLC, a Delaware limited liability company (“HINDL”), and GIP II Blue Holding, L.P., a Delaware limited partnership (“GIP” and, together with HINDL, the “Sponsors” and each, a “Sponsor”), entered into a Unit Repurchase Agreement (the “Repurchase Agreement”) pursuant to which HESM OpCo agreed to purchase from (a) HINDL 2,038,956 Class B units representing limited partner interests in HESM OpCo (“Class B Units”) and (b) GIP 3,112,886 Class B Units (such Class B Units subject to the Repurchase Agreement, the “Subject Units”) for an aggregate purchase price of approximately $190 million (the “Repurchase Transaction”). The purchase price per Class B Unit is $36.88, the closing price of the Class A shares representing limited partner interests in the Company (“Class A Shares”) on May 5, 2025. Pursuant to the terms of the Repurchase Agreement, immediately following the purchase of the Subject Units from the Sponsors, HESM OpCo will cancel the Subject Units, and the Company will cancel, for no consideration, an equal number of Class B shares representing limited partner interests in the Company held by Hess Midstream GP LP, a Delaware limited partnership and the general partner of the Company (the “General Partner”) and/or the Sponsors, in accordance with Section 5.5(e) of the Amended and Restated Agreement of Limited Partnership of the Company, dated as of December 16, 2019.
The terms of the Repurchase Agreement were unanimously approved by the Board of Directors (the “Board”) of Hess Midstream GP LLC (“GP LLC”), the general partner of the General Partner, and the Conflicts Committee of the Board (the “Conflicts Committee”) consisting solely of independent directors. The Conflicts Committee retained independent legal and financial advisors to assist it in evaluating and negotiating the Repurchase Agreement and the Repurchase Transaction.
Each of the Sponsors made customary representations and warranties in the Repurchase Agreement, including, among others, representations and warranties as to their organization, authorization to enter into the Repurchase Agreement, ownership of the Subject Units and necessary consents and approvals. Each of the Partnership Entities also made customary representations and warranties in the Repurchase Agreement, including, among others, representations and warranties as to their organization, authorization to enter into the Repurchase Agreement and necessary consents and approvals.
The Repurchase Agreement provides that the closing of the Repurchase Transaction is subject to the satisfaction or waiver of customary closing conditions. The Repurchase Agreement also provides for certain termination rights for both the Partnership Entities and the Sponsors, including if the Repurchase Transaction is not consummated on or before May 19, 2025 or if there is a material breach of the terms of the Repurchase Agreement that cannot be cured by such date. The Repurchase Transaction is expected to close on May 9, 2025.
The above description of the Repurchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Repurchase Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The Repurchase Agreement has been included to provide investors with information regarding its terms. The document is not intended to provide any other factual information about the Company, HESM OpCo, or the Sponsors. The representations, warranties and covenants contained in the Repurchase Agreement are being made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the agreement, made solely for the allocation of risk between the parties and may be subject to limitations agreed upon by the contracting parties.
Relationships
The Company is managed and controlled by GP LLC. GP LLC is wholly owned by Hess Infrastructure Partners GP LLC (“HIP GP”), and HIP GP is owned 50% by HINDL and 50% by GIP. As a result, certain individuals, including
officers and directors of Hess Corporation, HINDL, GIP, HIP GP and the General Partner, serve as officers and/or directors of more than one of such other entities.
Item 7.01. Regulation FD Disclosure.
On May 6, 2025, the Company issued a news release announcing the Repurchase Transaction and entry into the ASR Agreement (as defined below).
A copy of this press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Item 8.01. Other Events.
On May 5, 2025, following approval of the Board, the Company entered into an accelerated share repurchase (“ASR”) agreement with JPMorgan Chase Bank, National Association (the “Counterparty Bank”), to repurchase an aggregate of $10 million (the “Repurchase Price”) of Class A Shares (the “ASR Agreement”).
Pursuant to the terms of the ASR Agreement, the Company paid the Repurchase Price to the Counterparty Bank and will receive an initial delivery of 189,804 Class A Shares (which represents an aggregate value of 70% of the Repurchase Price based on the closing price of the Class A Shares on May 5, 2025). The exact total number of shares to be repurchased under the ASR Agreement will be based generally on the average of the daily volume-weighted average prices of the Class A Shares during the term of the ASR transaction, subject to adjustments pursuant to the terms and conditions of the ASR Agreement. The Class A Shares repurchased under the ASR Agreement will be cancelled following settlement thereof. Upon final settlement of the ASR transaction, the Company may be entitled to receive additional Class A Shares from the Counterparty Bank or, under certain circumstances, the Company may be required to deliver Class A Shares or make a cash payment, at its option, to the Counterparty Bank.
The ASR Agreement is scheduled to terminate in May 2025. The Company funded the Repurchase Price with borrowings under its existing revolving credit facility.
Cautionary Statement Relevant to Forward-Looking Information
This Current Report on Form 8-K includes forward-looking statements regarding future events. These forward-looking statements are based on the Company’s current plans and expectations and involve a number of risks and uncertainties that could cause actual results and events to vary materially from the results and events anticipated or implied by such forward-looking statements. For a further discussion of these risks and uncertainties, please refer to the “Risk Factors” section of the Company’s most recently filed Annual Report on Form 10-K and in other filings made by the Company with the Securities and Exchange Commission. While the Company may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so, even if new information becomes available.
Item 9.01. Exhibits
| 10.1 | Unit Repurchase Agreement, dated as of May 5, 2025, by and among Hess Midstream LP, Hess Midstream Operations LP, Hess Investments North Dakota LLC and GIP II Blue Holding, L.P. | |
| 99.1 | News Release Announcing the Repurchase Transaction | |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HESS MIDSTREAM LP | ||||
| By: | Hess Midstream GP LP, | |||
| its general partner | ||||
| By: | Hess Midstream GP LLC, | |||
| its general partner | ||||
| Date: May 7, 2025 |
By: | /s/ Jonathan C. Stein | ||
| Name: Jonathan C. Stein | ||||
| Title: Chief Financial Officer | ||||