SCHEDULE 13D/A: Hess Midstream LP Undergoes Major Ownership Shift as Blue Holding Exits, Hess Corporation Consolidates Control

Hess Midstream LP announced a secondary offering where Blue Holding sold over 15 million Class A Shares, leading to Blue Holding's full exit and Hess Corporation's consolidated control over the partnership's general partner.

Summary

• Hess Midstream LP filed Amendment No. 22 to its Schedule 13D, detailing a significant ownership and governance change.
• On May 28, 2025, an Underwriting Agreement was signed for the May 2025 Secondary Offering.
• Blue Holding sold 15,022,517 Class A Shares of Hess Midstream LP at $36.86 per share to J.P. Morgan Securities LLC and Citigroup Global Markets Inc. as underwriters.
• The shares sold included 449,000 Class A Shares indirectly owned and 14,573,517 Class A Shares from redemption of OpCo Class B Units.
• The secondary offering closed on May 30, 2025.
• Following the closing, Blue Holding no longer holds any direct or indirect ownership interest in Hess Midstream LP or its general partner entities.
• Hess Investments now owns 100% interest in HIP GP LLC.
• Hess Investments North Dakota LLC and Hess Corporation beneficially own 79,428,190 Class A Shares, representing 37.8% of the 131,084,592 Class A Shares outstanding.
• Hess Midstream LP and Hess Investments are subject to a 60-day lock-up period from May 28, 2025, preventing further sales of Class A Shares without underwriter consent.

Sentiment

Score: 7

Explanation: The document describes a planned transaction that successfully closed, leading to a consolidation of control by Hess Corporation, which is generally a positive for strategic alignment. The exit of Blue Holding and the associated governance changes appear to be a structured and anticipated event. The lock-up period is a minor, temporary restriction.

Positives

• Consolidation of control by Hess Corporation over Hess Midstream LP's general partner, Hess Infrastructure Partners GP LLC, which could streamline decision-making.
• The secondary offering provided liquidity for Blue Holding's investment.

Negatives

• The 60-day lock-up period restricts the ability of Hess Midstream LP and Hess Investments to sell Class A Shares for 60 days, potentially limiting financial flexibility during that period.

Risks

• The 60-day lock-up period for Hess Midstream LP and Hess Investments could temporarily limit their ability to raise capital through equity sales or adjust their holdings.

Future Outlook

Hess Midstream LP and Hess Investments are subject to a 60-day lock-up period from May 28, 2025, during which they cannot sell or dispose of Class A Shares without the underwriters' consent, with certain exceptions.

Management Comments

• The directors appointed by the Reporting Persons will continue to have the voting power necessary to control the day-to-day management and operation of the business and assets of the Issuer, subject to certain actions with respect to the Issuer's business which will require the approval of at least one of the Reporting Persons' director appointments and one independent director.

Industry Context

This transaction represents a significant shift in the ownership and governance structure of Hess Midstream LP, consolidating control under Hess Corporation. Such consolidation can be a strategic move in the midstream sector to streamline operations and align interests, particularly as energy companies seek greater control over their infrastructure assets.

Management Changes

Corporate Governance

Related Party Transactions

• The secondary offering involved Blue Holding, a former significant owner, selling shares, and Hess Investments (a Hess Corporation subsidiary) consolidating its ownership in the general partner. This is a transaction between parties that were previously related through joint ownership/governance.

Stakeholder Impact

• Shareholders: The secondary offering increased the public float of Class A Shares. The consolidation of control by Hess Corporation may lead to more aligned strategic decisions.
• Management/Employees: The change in governance structure and board composition may lead to a more streamlined decision-making process under Hess Corporation's full control.

Next Steps

• Completion of the 60-day lock-up period for Hess Midstream LP and Hess Investments regarding Class A Share sales.

Key Dates

Recommendation

Keywords

Hess Midstream LP, Hess Corporation, Schedule 13D, Secondary Offering, Ownership Change, Corporate Governance, Midstream, Energy Infrastructure, SEC Filing, Blue Holding, Limited Partnership, Class A Shares