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Hess Midstream Chief Financial Officer Jonathan Stein recently emphasized the company's commitment to a distinct financial strategy focused on delivering consistent returns to shareholders.
Hess Midstream LP highlighted the execution of a successful $100 million sponsor unit repurchase in a June 27 Business Wire news release.
“We continue to execute a unique and differentiated financial strategy, prioritizing consistent and ongoing return of capital to shareholders,” Stein said in the release.
Hess Midstream LP has entered into a definitive agreement to repurchase around $100 million worth of Class B units from its sponsors, Hess Corporation and Global Infrastructure Partners, the release reported. The agreement was approved by the board of directors of Hess Midstream's general partner, following the unanimous recommendation of its conflicts committee comprised of independent directors.
“The unit repurchase transaction is expected to provide immediate accretion to our shareholders," Stein added, according to the release. "Following this unit repurchase, we expect to continue to have more than $1 billion of financial flexibility through 2025 that can be used to support potential incremental unit repurchases.”
Per the repurchase agreement, the units being repurchased will be eliminated upon the completion of the transaction, the release said. This move is anticipated to boost the distributable cash flow per Class A share, creating room for additional distribution growth beyond the company's annual target of at least 5% until 2025.
Hess Midstream Operations LP, a subsidiary of Hess Midstream, has reached an agreement to buy back 3,350,084 Class B units, representing around 1.4% of the company, according to the release. The purchase price per Class B unit will be $29.85, based on the closing price of Class A shares June 26.
Following the unit repurchase, the public ownership of Hess Midstream is projected to increase to approximately 24.0%, the release said. The transaction is scheduled to be completed June 29.