SCHEDULE 13D/A: BlackRock Amends Hess Midstream LP Stake, Discloses $190 Million Unit Repurchase

BlackRock Portfolio Management LLC has updated its beneficial ownership in Hess Midstream LP, revealing a significant $190 million unit repurchase agreement by Hess Midstream Operations LP.

Summary

• BlackRock Portfolio Management LLC (BPM) filed Amendment No. 3 to its Schedule 13D, updating its beneficial ownership of Class A Shares of Hess Midstream LP.
• BPM beneficially owns 18,731,641 Class A Shares, which represents 13.9% of the class.
• This amendment includes the acquisition of 147,238 Class A Shares by Reporting Advisory Subsidiaries for an aggregate purchase price of $5,048,874, acquired for investment purposes.
• A key development is the "May 2025 Repurchase Agreement" dated May 5, 2025, where Hess Midstream Operations LP (HESM Opco) agreed to purchase 5,151,842 Opco Class B Units (2,038,956 from Hess Investments and 3,112,886 from Blue Holding).
• The aggregate purchase price for this repurchase transaction is approximately $190 million, at a price of $36.88 per unit.
• Following the repurchase, HESM Opco will cancel the Repurchased Units, and Hess Midstream LP will cancel an equal number of Class B Shares held by Hess Investments and Blue Holding for no consideration.
• BlackRock's managed accounts also hold cash-settled swaps: Long Derivative Agreements for 17,700 Class A Shares and Short Derivative Agreements for 142,277 Class A Shares, providing economic exposure without voting or dispositive power.

Sentiment

Score: 6

Explanation: The sentiment is slightly positive due to the significant unit repurchase, which often signals management's confidence and can be accretive to shareholder value. However, the document is primarily a factual disclosure of ownership and a transaction, not a performance report, so the sentiment is not strongly positive.

Positives

• Hess Midstream Operations LP is undertaking a significant unit repurchase of approximately $190 million, which can reduce the outstanding unit count and potentially enhance per-share metrics for remaining shareholders.
• The repurchase price of $36.88 per unit provides a clear valuation for the transaction.

Negatives

• No explicit negative information regarding the company's performance or outlook is presented in this ownership disclosure.

Risks

• The document mentions that accounts managed by the Reporting Business Units have entered into Long Derivative Agreements (cash-settled swaps) with respect to 17,700 Class A Shares, providing economic exposure comparable to ownership but without voting or dispositive power.
• Similarly, Short Derivative Agreements (cash-settled swaps) have been entered into for 142,277 Class A Shares, providing economic results opposite to ownership, also without voting or dispositive power. These derivatives introduce market exposure for the reporting entity.

Future Outlook

The document primarily details a past event (the repurchase agreement dated May 5, 2025) and current beneficial ownership. It does not provide forward-looking statements or guidance regarding the Issuer's future financial performance or strategic direction.

Industry Context

This filing primarily concerns a change in beneficial ownership and a specific unit repurchase transaction by Hess Midstream LP. It does not provide broader industry context or trends, focusing instead on the specific corporate actions and ownership structure of the Issuer.

Related Party Transactions

• The May 2025 Repurchase Agreement involves Hess Midstream Operations LP purchasing units from Hess Investments North Dakota LLC and Blue Holding, which are likely related parties given the context of the original Schedule 13D and the nature of the transaction (cancellation of Class B Shares held by these entities).

Stakeholder Impact

• Shareholders: The unit repurchase could potentially increase earnings per share and improve valuation metrics for existing Class A shareholders by reducing the total outstanding units/shares.
• Hess Investments North Dakota LLC and Blue Holding: These entities are selling a significant number of Opco Class B Units for approximately $190 million.

Next Steps

• HESM Opco will cancel the Repurchased Units immediately following the closing of the May 2025 Repurchase Transaction.
• The Issuer (Hess Midstream LP) will cancel an equal number of Class B Shares held by Hess Investments and Blue Holding for no consideration.

Key Dates

Keywords

Hess Midstream LP, HESM, BlackRock, Schedule 13D, Beneficial Ownership, Share Repurchase, Unit Repurchase Agreement, Class A Shares, Class B Units, Midstream, Energy Infrastructure, SEC Filing, Investment Management, Derivative Agreements