Hess Midstream LP Announces Signing Of Accretive $100M Sponsor Unit Repurchase
Portfolio Pulse from Benzinga Newsdesk
Hess Midstream LP (HESM) has announced a definitive agreement to repurchase $100 million of Class B units from its Sponsors, Hess Corporation and Global Infrastructure Partners. The repurchase will reduce the total unit count by approximately 20% and is expected to provide immediate accretion to shareholders. The transaction, unanimously approved by the Board of Directors, is part of Hess Midstream's strategy to return capital to shareholders, with $1.55 billion already returned since 2021. The repurchase is expected to increase distributable cash flow per Class A share and support distribution growth above the annual target of 5% through 2025. The repurchase will be funded through borrowings under Hess Midstream's existing credit facility and is expected to close on November 16, 2023.
November 14, 2023 | 1:21 pm
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POSITIVE IMPACT
Hess Midstream LP's repurchase of $100 million Class B units is expected to be accretive to shareholders, reducing total unit count by 20% and potentially increasing distributable cash flow per Class A share.
The repurchase of units is typically seen as a positive signal to the market, indicating that the company believes its stock is undervalued. The reduction in total unit count and the potential for increased distributable cash flow per share are likely to be viewed favorably by investors, which could lead to a short-term increase in the stock price. The confidence in this analysis is high due to the clear intent of the company to return value to shareholders and the unanimous approval by the Board.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 100