SCHEDULE 13D/A: BlackRock Amends Hess Midstream LP Stake, Details Option Exercise and Derivative Positions

BlackRock Portfolio Management LLC has filed an Amendment No. 2 to its Schedule 13D for Hess Midstream LP, updating its beneficial ownership to 13.9% and detailing recent share acquisitions, an underwriter's option exercise, and derivative positions.

Summary

• BlackRock Portfolio Management LLC (BPM) filed Amendment No. 2 to its Schedule 13D for Hess Midstream LP, amending and supplementing the original filing from January 30, 2025.
• BPM's aggregate beneficial ownership of Class A Shares is 18,715,111, representing 13.9% of the class, with sole voting and dispositive power over these shares.
• On February 13, 2025, a Reporting Advisory Subsidiary, acting as an investment advisor for client accounts, purchased 88 Class A Shares at a price of $39.55 per share.
• The total Class A Shares beneficially owned by the Reporting Advisory Subsidiaries, for which BPM has filing authority, is 130,708, acquired for an aggregate purchase price of $4,447,803.
• On February 14, 2025, an Underwriter exercised its option to purchase 1,650,000 Class A Shares from Blue Holding at $39.11 per share, with the transaction consummated on February 19, 2025.
• In connection with this sale, Blue Holding redeemed 1,650,000 OpCo Class B Units for a corresponding number of Class A Shares.
• As of February 18, 2025, accounts managed by Reporting Business Units held Long Derivative Agreements (cash-settled swaps) relating to 30,413 Class A Shares, representing less than 0.1% economic exposure.
• As of February 18, 2025, accounts managed by Reporting Business Units also held Short Derivative Agreements (cash-settled swaps) relating to 138,254 Class A Shares, representing approximately 0.1% economic exposure.
• The beneficial ownership calculation is based on 116,736,900 Class A Shares outstanding following the February 2025 Option Exercise, plus 17,686,403 Class B units beneficially owned by GIP Entities and convertible into Class A Shares.

Sentiment

Score: 6

Explanation: The document is neutral in tone, primarily factual reporting of ownership changes and transactions. The option exercise and share acquisitions are standard market activities for a large institutional investor, indicating ongoing interest without strong positive or negative implications for the underlying company's performance.

Positives

• The acquisition of shares by Reporting Advisory Subsidiaries for client accounts indicates continued investment interest in Hess Midstream LP.
• The exercise of the underwriter's option to purchase 1,650,000 Class A Shares suggests a successful offering or placement of shares.

Future Outlook

The document does not provide explicit forward-looking statements or guidance regarding the Issuer's future performance or strategic direction. It primarily details changes in beneficial ownership and related transactions by the reporting entity.

Industry Context

This filing reflects a significant institutional investor's (BlackRock) ongoing position and adjustments in a midstream energy company. The transactions, including an underwriter's option exercise, suggest active capital markets activity related to Hess Midstream LP shares. The use of derivatives (long and short swaps) indicates sophisticated portfolio management strategies by BlackRock's various units to manage economic exposure without direct voting control.

Stakeholder Impact

• Shareholders: The filing provides transparency regarding a significant institutional investor's stake and trading activities, which can influence market perception and liquidity.

Next Steps

• The document implies ongoing management of investment positions by BlackRock Portfolio Management LLC and its subsidiaries, including potential future adjustments to their holdings in Hess Midstream LP.

Key Dates

Recommendation

Keywords

Hess Midstream LP, HESM, Schedule 13D, BlackRock, Beneficial Ownership, Class A Shares, Option Exercise, Derivative Agreements, Cash-Settled Swaps, SEC Filing, Investment Advisory, Limited Partnership