BSM to begin cash tender offer to repurchase Series A preferred units

Black Stone Minerals LP (NYSE: BSM) intends to begin a cash tender offer to purchase up to 100% of the 117,963 outstanding Series A preferred units from its preferred unitholders at the units’ par value of $1,000 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 begin the proposed tender offer during the week of Nov. 2, and the tender offer will remain open for at least 20 business days following the date of the commencement of the offer.

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.”


Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...