(Source: Shutterstock.com)
Hess Midstream LP’s subsidiary Hess Midstream Operations LP repurchased approximately $100 million of Class B units from Hess Corp. and Global Infrastructure Partners.
In total, 2,724,052 of Class B units were repurchased for approximately 1.2% of the consolidated company. The purchase price per Class B unit is $36.71, to be funded with cash on hand.
Following the transaction’s close on June 26, Hess Midstream ownership is now 41% by the public, 21.2% by Global Infrastructure Partners and 37.8% by Hess Corp.
The terms of the transaction were approved by the board of Hess Midstream’s general partner.
Repurchased units will now be canceled following the closing of the transaction. Hess expects this to result in an increased distributable cash flow per Class A share above its annual distribution target through 2026.
The unit repurchases are part of the company’s financial strategy to deliver shareholder returns, Hess Midstream CFO Jonathan Stein said in the June 25 press release announcing the transaction.
Ongoing unit repurchases began in 2021, reducing the total unit count by almost 25%, Stein said. Hess has returned $1.75 billion to shareholders through repurchases since then.
"We expect to continue to have more than $1.25 billion of financial flexibility through 2026 that can be used to support potential incremental unit repurchases," he added.
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