Global Infrastructure Investors II, LLC, and related entities have completed a significant transaction involving shares of Hess (NYSE:HES) Midstream LP (NYSE:HESM), a company specializing in crude petroleum and natural gas. According to the latest filings, the entities have sold their entire stake of Class A shares in the company.
The transaction, which took place on September 20, 2024, involved the sale of 12,650,000 Class A shares at an average price of $35.12 per share, resulting in a total sale value of approximately $444.27 million. This move has reduced their holding in Hess Midstream LP to zero Class A shares.
Prior to this sale, Global Infrastructure Investors II, LLC, along with Global Infrastructure GP II, L.P., GIP Blue Holding GP, LLC, and GIP II Blue Holding, L.P., converted an equivalent number of Opco Class B Units into Class A shares of Hess Midstream LP. This conversion was executed at no cost, as indicated by the transaction price of $0.00 per share, and was immediately followed by the sale of the newly acquired Class A shares.
The entities involved in this transaction have a complex ownership structure, where each may be deemed to beneficially own the securities held by the other. However, they have disclaimed beneficial ownership of these securities except to the extent of their pecuniary interest.
As a result of these transactions, Hess Midstream LP now has a smaller group of principal shareholders, with the above-mentioned entities exiting their position entirely. Investors and market watchers will likely follow closely to see how this substantial sale affects the trading dynamics and ownership concentration of Hess Midstream LP moving forward.
In other recent news, Hess Midstream LP has reported robust results for the second quarter of 2024, surpassing production expectations and raising its full-year guidance. The company has seen a 7% and 8% increase in gas processing and oil terminaling volumes, respectively, from the previous quarter. Additionally, Hess Midstream has initiated a public offering of 10 million Class A shares, a transaction managed by Citigroup. The company has also announced an agreement to repurchase approximately $100 million of Class B units, a move that has received unanimous approval from the board of its general partner.
These recent developments underscore Hess Midstream's strategic planning and operational strength. The company projects Bakken net production to be between 200,000 to 205,000 barrels of oil equivalent per day in Q3. Furthermore, Hess Midstream anticipates generating $675 million to $725 million in adjusted free cash flow for 2024. The company's future plans include maintaining a balance between a solid leverage ratio and returning capital to shareholders, with expansion plans slated for 2027 to address the need for additional gas processing capacity.
InvestingPro Insights
In light of the significant transaction involving Hess Midstream LP (NYSE:HESM), it is noteworthy to consider the company's current financial health and market position. Hess Midstream LP has demonstrated a commitment to returning value to shareholders, as evidenced by a consistent increase in its dividend, with payments maintained for 8 consecutive years and a 7-year streak of raising its dividend. This commitment is underscored by a robust dividend yield of 7.49% as of the last twelve months ending Q2 2024.
InvestingPro Tips suggest that while the company is trading at a high Price/Earnings (P/E) ratio of 19.48, reflecting a premium relative to near-term earnings growth, Hess Midstream LP has shown strong performance over the last five years. Furthermore, analysts predict profitability for the current year, which is supported by the company's positive return on assets of 16.6% during the same period.
From a market perspective, Hess Midstream LP's market capitalization stands at $7.84 billion, and the stock has experienced a year-to-date price total return of 19.44%, indicating a strong performance so far this year. Despite the recent sale by Global Infrastructure Investors II, LLC, and related entities, the company's financial resilience and market performance may continue to attract investor interest.
For those seeking more detailed analysis, there are additional InvestingPro Tips available for Hess Midstream LP, which can be found by visiting https://www.investing.com/pro/HESM. These tips provide deeper insights into the company's financials and market performance, which could be particularly valuable in light of the recent ownership changes.
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