Black Stone Minerals, L.P. Announces Intention to Launch Cash Tender Offer to Repurchase up to 100% of its Series A Preferred Units
Black Stone Minerals, L.P. (NYSE: BSM) (“Black Stone Minerals,” “BSM,”
or the “partnership”) announced today that it intends to commence a cash
tender offer to purchase up to 100% of the 117,963 outstanding Series A
Preferred Units (the “preferred units”) from its preferred unitholders
at the units’ par value of $1,000.00 per preferred unit, plus unpaid
accrued yield. The partnership intends to fund the tender offer with
cash on hand and funds available under its revolving credit facility.
Black Stone Minerals expects to commence the proposed tender offer
during the week of November 2, 2015.
Thomas L. Carter, Jr., Chairman, President, and CEO of BSM, said, “The
proposed tender offer reflects our continued focus on maximizing the
cash available for distribution to our common and subordinated
unitholders. We expect that financing a tender offer for the preferred
units, which yield 10%, with borrowings under our revolving credit
facility at a cost of approximately 2% would result in significant cash
savings through the end of 2018 if all the preferred units were to be
tendered. In addition, any tender of preferred units avoids the
corresponding dilution to existing common and subordinated unitholders
that would otherwise occur with the mandatory conversion over time of
those preferred units into common and subordinated units. Pending the
outcome of our fall borrowing base redetermination, we have
approximately $570 million of borrowing capacity currently available to
us under our revolving credit facility, and we believe that the proposed
tender will be an efficient use of our capital without limiting our
ability to pursue accretive acquisitions.”
Information Regarding the Proposed Tender Offer
Black Stone Minerals intends to offer to purchase up to 100% of its
117,963 preferred units at their par value of $1,000.00 per preferred
unit plus unpaid accrued yield. The partnership expects to commence the
tender offer during the first week of November, and the tender offer
will remain open for at least twenty business days following the date of
the commencement of the offer.
The tender offer will not be conditioned upon any minimum number of
units being tendered. Tendering unitholders may tender all or a portion
of their preferred units and will receive the purchase price in cash,
less applicable withholding taxes, subject to the conditions of the
tender offer. These conditions, tendering instructions, and a complete
explanation of the tender offer’s terms and conditions will be described
in the Offer to Purchase, the related Letter of Transmittal, and other
materials relating to the tender offer that will be distributed to the
preferred unitholders upon commencement of the offer.
While the Board of Directors of BSM’s general partner has authorized the
partnership to make the tender offer, neither the partnership, its
general partner, nor its general partner’s Board of Directors make any
recommendation to any preferred unitholder whether to tender or refrain
from tendering any preferred units. Nor has BSM authorized any other
person to make any recommendation. Preferred unitholders must decide
whether to tender their preferred units and, if so, how many preferred
units to tender. In doing so, preferred unitholders should carefully
evaluate all of the information in the tender offer documents, when
available, before making any decision with respect to the tender offer
and should consult their own financial and tax advisors.
The discussion of the tender offer contained in this press release is
for informational purposes only and is not an offer to purchase, nor the
solicitation of an offer to sell, any of BSM’s preferred units. The
anticipated tender offer described in this press release has not yet
commenced, and while the partnership intends to commence the tender
offer within a reasonable time and complete the tender offer, there can
be no assurances that the partnership will commence or complete the
tender offer on the terms described in this press release, or at all. If
the partnership commences the offer, the offer to purchase and
solicitation of preferred units will be made only pursuant to an Offer
to Purchase, the related Letter of Transmittal, and other related
materials, as they may be amended or supplemented. The Offer to
Purchase, related Letter of Transmittal, and other related materials
will be distributed to the preferred unitholders upon commencement of
the tender offer. Preferred unitholders should read those materials
carefully when they become available before making any decisions with
respect to the tender offer because they will contain important
information, including instructions on how to tender the preferred
units. BSM will also file a Tender Offer Statement on Schedule TO (the
“Tender Offer Statement”) with the Securities and Exchange Commission
(the “SEC”). The Tender Offer Statement, including the Offer to
Purchase, the related Letter of Transmittal, and other related
materials, as well as any amendments or supplements, will be available
to preferred unitholders for no charge on the SEC's website (www.sec.gov).
Preferred unitholders may also obtain a copy of these documents, as well
as any other documents that Black Stone Minerals has filed with the SEC,
without charge, by contacting BSM or through its website at www.blackstoneminerals.com.
Forward-Looking Statements
This news release includes forward-looking statements. All statements,
other than statements of historical facts, included in this news release
that address activities, events, or developments that Black Stone
Minerals expects, believes, or anticipates will or may occur in the
future are forward-looking statements. Terminology such as “will,”
“may,” “should,” “expect,” “anticipate,” “plan,” “project,” “intend,”
“estimate,” “believe,” “target,” “continue,” “potential,” the negative
of such terms, or other comparable terminology often identify
forward-looking statements. Except as required by law, Black Stone
Minerals undertakes no obligation and does not intend to update these
forward-looking statements to reflect events or circumstances occurring
after this news release. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date of
this news release. All forward-looking statements are qualified in their
entirety by these cautionary statements. These forward-looking
statements involve risks and uncertainties, many of which are beyond the
control of Black Stone Minerals, which may cause the partnership’s
actual results to differ materially from those implied or expressed by
the forward-looking statements. Important factors that could cause
actual results to differ materially from those in the forward-looking
statements include, but are not limited to, those summarized below:
-
the partnership’s ability to execute its business strategies;
-
the volatility of realized oil and natural gas prices;
-
the level of production on the partnership’s properties;
-
regional supply and demand factors, delays, or interruptions of
production;
-
the partnership’s ability to replace its oil and natural gas reserves;
and
-
the partnership’s ability to identify, complete, and integrate
acquisitions.
About Black Stone Minerals, L.P.
Black Stone Minerals is one of the largest owners of oil and natural gas
mineral interests in the United States. The partnership owns mineral
interests and royalty interests in over 40 states and 60 onshore basins
in the continental United States. The partnership also owns and
selectively participates in non-operating working interests in
established development programs, primarily on its mineral and royalty
holdings. The partnership expects that its large, diversified asset base
and long-lived, non-cost-bearing mineral and royalty interests will
result in production and reserve growth, as well as increasing quarterly
distributions to its unitholders.
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