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.”


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