Sec Form 13D Filing - Global Infrastructure Investors II LLC filing for Hess Midstream Operations LP (HESM) - 2019-10-04

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.     )*

Hess Midstream Partners LP

(Name of Issuer)

Common Units

(Title of Class of Securities)

428104103

(CUSIP Number)

Global Infrastructure Management LLC

Attention: Julie Ashworth

1345 Avenue of the Americas, 30^th Floor,

New York, New York 10105

(212) 315-8100

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

October 3, 2019

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box.  ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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This statement on Schedule 13D (the “Schedule 13D”) relates to the common units (the “Common Units”) of Hess Midstream Partners LP, a Delaware limited partnership (the “Issuer”), whose principal executive offices are located at 1501 McKinney Street, Houston, TX 77010.

The Schedule 13D is being filed by the following persons (each a “Reporting Person” and, collectively, the “Reporting Persons”):

Each of the Reporting Persons is organized under the laws of the State of Delaware. The business address for each of the Reporting Persons is c/o Global Infrastructure Investors II LLC, 1345 Avenue of the Americas, 30^th Floor, New York, NY 10105. The principal business of each of the Reporting Persons is investing in securities, including the securities of the Issuer.

Information with respect to the directors and executive officers of Blue Holding GP and Global Investors, (collectively, the “Related Persons”), including name, business address, present principal occupation or employment and citizenship, is listed on the attached Schedule A, which is incorporated herein by reference.

During the last five years, none of the Reporting Persons or Related Persons (i) has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Prior to the Issuer’s initial public offering (“IPO”), Blue Holding purchased a 50% ownership interest in Hess Infrastructure Partners LP (“HIP”), a Delaware limited partnership and a midstream energy joint venture between Blue Holding and Hess Investments North Dakota LLC (“Hess Investments”), for approximately $2.675 billion. In connection with the closing of the IPO, HIP contributed certain assets to the Issuer in exchange for, among other consideration, the issuance to Blue Holding of 5,141,327 Common Units and 13,639,827 subordinated units (“Subordinated Units”) of the Issuer, which will automatically be converted into Common Units on a one-to-one basis upon the termination of the subordination period.

Blue Holding obtained the funds to purchase its ownership interest in HIP through a capital contribution from its partners.

Partnership Restructuring Agreement

On October 3, 2019, following negotiations with the conflicts committee of the board of directors (the “Board”) of Hess Midstream Partners GP LLC (“HESM GP LLC”), the general partner of Hess Midstream Partners GP LP (“HESM GP LP”), which is the general partner of the Issuer, Hess Investments, Blue Holding (together with Hess Investments, the “Existing Sponsors”), HIP, Hess Infrastructure Partners GP LLC, the general partner of HIP (“HIP GP LLC”), HESM GP LLC, HESM GP LP, Hess Midstream LP, a wholly owned subsidiary of HIP GP LLC (“New HESM”), Hess Midstream GP LP, a wholly owned subsidiary of New HESM (“New HESM GP LP”), Hess Midstream New Ventures II, LLC, a wholly owned subsidiary of New HESM (“Merger Sub”), and certain

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subsidiaries of HIP GP LLC and the Issuer entered into a Partnership Restructuring Agreement (the “Restructuring Agreement”) which provides for the restructuring (the “Restructuring”) of the Issuer and its subsidiaries through a series of related transactions. Pursuant to the Restructuring Agreement and the transaction documents entered into or to be entered into in connection therewith, including an Agreement and Plan of Merger (the “Merger Agreement”), dated October 3, 2019, by and among the Issuer, HESM GP LP, New HESM, New HESM GP LP, HIP GP LLC and Merger Sub, at the closing of the transactions contemplated by the Restructuring Agreement, including the Merger (as defined below), among other things:

As a result of the Restructuring, Hess Investments and Blue Holding will each hold 133,208,464 HESM Class B Units.

The Restructuring Agreement contains certain representations, warranties and covenants of HIP, HIP GP LLC, Hess Investments, Blue Holding and the Issuer, including, among others, covenants of the Issuer to conduct its businesses in the ordinary course between the execution and delivery of the Restructuring Agreement and the consummation of the Restructuring and not to engage in certain kinds of transactions during such period. In addition, certain of the parties made customary covenants, including, among others, to use commercially reasonable efforts to cause a registration statement on Form S-4 of New HESM to be declared effective by the Securities and Exchange Commission, to cause the filing of the notification and report forms required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act’), to cause the New HESM Class A Shares to be approved for listing on the New York Stock Exchange, to cause the delisting of the Common Units from the New York Stock Exchange and to refinance certain indebtedness issued by HIP.

Assuming the satisfaction of the conditions set forth in the Restructuring Agreement, the Restructuring is expected to close in the fourth quarter of 2019. Consummation of the Restructuring is not subject to a financing condition, but is subject to customary closing conditions, including (i) the receipt of approval or consent for the Restructuring of any governmental authority required pursuant to any applicable antitrust law, (ii) the absence of any order or injunction prohibiting the consummation of the Restructuring and (iii) subject to customary materiality qualifiers, the accuracy of the parties’ applicable representations and warranties contained in the Restructuring Agreement and compliance by the parties with their applicable covenants contained in the Restructuring Agreement.

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The Restructuring Agreement contains certain termination rights for the Issuer, Hess Investments and Blue Holding in cases where the other party has committed a breach or failed to perform any covenant or if the Restructuring has not been consummated before March 31, 2020.

The foregoing description of the Restructuring Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement, which is filed as an exhibit to this Schedule 13D and is incorporated herein by reference.

The Merger

As described above, pursuant to the Restructuring Agreement, the Issuer, HESM GP LP, New HESM, New HESM GP LP, HIP GP LLC and Merger Sub entered into the Merger Agreement pursuant to which, among other things, (a) Merger Sub will merge with and into the Issuer, with the Issuer surviving the Merger, (b) the limited liability company interests in Merger Sub will be converted into Common Units, (c) each Common Unit issued and outstanding (other than any held by Hess Investments, Blue Holding, HIP, HIP GP LLC and certain of their affiliates) will be converted into the right to receive one New HESM Class A Share and (d) each issued and outstanding phantom unit of the Issuer will be converted into a phantom unit of New HESM. The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement, which is filed as an exhibit to this Schedule 13D and is incorporated herein by reference.

Third Amended and Restated Agreement of Limited Partnership of the Issuer

Pursuant to the Restructuring Agreement, the Existing Sponsors, HESM GP and New HESM will amend and restate the existing partnership agreement of the Issuer by executing the Third Amended and Restated Agreement of Limited Partnership of the Issuer (the “A&R Partnership Agreement”) in the form attached as an exhibit to the Restructuring Agreement. The A&R Partnership Agreement provides for, among other things, (a) the recapitalization of the Issuer;(b) the conversion of each Common Unit held by Hess Investments and Blue Holding into a HESM Class B Unit; (c) the conversion of each Subordinated Unit held by New HESM into a HESM Class A Unit; and (d) the conversion of each Subordinated Unit held by Hess Investments and Blue Holding into a HESM Class B Unit. The foregoing description of the A&R Partnership Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement, which is filed as an exhibit to the Restructuring Agreement which is filed as an exhibit to this Schedule 13D.

General

The Reporting Persons acquired the securities described in this Schedule 13D for investment purposes and intend to review their investments in the Issuer on a continuing basis. Any actions the Reporting Persons might undertake may be made at any time and from time to time without prior notice and will be dependent upon the Reporting Persons’ review of numerous factors, including, but not limited to: an ongoing evaluation of the Issuer’s business, financial condition, operations and prospects; price levels of the Issuer’s securities; general market, industry and economic conditions; the relative attractiveness of alternative business and investment opportunities; and other future developments.

Subject to the Restructuring Agreement, the Reporting Persons may acquire additional securities of the Issuer, or retain or sell all or a portion of the securities then held, in the open market or in privately negotiated transactions. As described herein, the Reporting Persons are seeking to engage in reorganization transactions to streamline and simplify the organizational structure of the Issuer, which, if completed, would result in the de-listing or de-registration of the Common Units. In addition, the Reporting Persons and their designees to the Board may engage in discussions with management, the Board, and securityholders of the Issuer and other relevant parties or encourage, cause or seek to cause the Issuer or such persons to consider or explore other extraordinary corporate transactions, such as: sales or acquisitions of assets or businesses; changes to the capitalization or distribution policy of the Issuer; or other material changes to the Issuer’s business or corporate structure, including changes in management or the composition of the Board. There can be no assurance, however, that the Restructuring or any other proposed transaction will receive the requisite approvals from the respective governing bodies, or that the Restructuring or any other such transaction will be successfully implemented.

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Other than as described above, the Reporting Persons do not currently have any plans or proposals that relate to, or would result in, any of the matters listed in Items 4(a)—(j) of Schedule 13D, although, depending on the factors discussed herein, the Reporting Persons may change their purpose or formulate different plans or proposals with respect thereto at any time.

(a) – (b)

The following sets forth the aggregate number of Common Units and percentage of Common Units outstanding beneficially owned by each of the Reporting Persons, as well as the number of Common Units as to which each Reporting Person has the sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition of, or shared power to dispose or to direct the disposition of, as of the date hereof, based on 27,345,309 Common Units outstanding as of June 30, 2019:

Blue Holding is the record holder of 5,141,327 Common Units. Blue Holding GP is the general partner of Blue Holding. Global GP is the sole member of Blue Holding GP. Global Investors is the sole general partner of Global GP. As a result, each of Blue Holding GP, Global GP and Global Investors may be deemed to share beneficial ownership of the Common Units held of record by Blue Holding.

As a result of the negotiations and discussions related to the Restructuring Agreement by and among the Reporting Persons, on the one hand, and Hess Corporation and Hess Investments (together, the “Hess Parties”) on the other, the Reporting Persons and the Hess Parties may each be deemed to be a member of a “group” for purposes of Section 13(d) of the Exchange Act. However, neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission that the Reporting Persons or any of the Hess Parties are members of any such group. Each of the Hess Parties has separately made a Schedule 13D filing reporting the Common Units they may be deemed to beneficially own. Collectively, the Reporting Persons and the Hess Parties beneficially own 10,282,654 Common Units, representing approximately 37.6% of the outstanding Common Units. Each Reporting Person disclaims beneficial ownership of the Common Units that may be deemed to be beneficially owned by the Hess Parties.

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Item 4 above summarizes certain provisions of the Restructuring Agreement and the Merger Agreement and is incorporated herein by reference. A copy of each agreement is attached as an exhibit to this Schedule 13D, and is incorporated herein by reference.

Except as set forth herein, none of the Reporting Persons or Related Persons has any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of the Issuer, including but not limited to any contracts, arrangements, understandings or relationships concerning the transfer or voting of such securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.

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SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: October 4, 2019

Schedule A

The name, present principal occupation or employment and citizenship of each of the executive officers and directors of GIP Blue Holding GP, LLC and Global Infrastructure Investors II, LLC are set forth below. Unless otherwise noted, the business address of each individual is c/o Global Infrastructure Investors II LLC, 1345 Avenue of the Americas, 30^th Floor, New York, NY 10105.

GIP Blue Holding GP, LLC

Global Infrastructure Investors II, LLC