UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
Black Stone
Minerals, L.P.
(Name of Subject Company (issuer) and Filing Person (Issuer and Offeror))
Series A Preferred Units, Par Value $1,000.00 per Preferred Unit
(Title of Class of Securities)
None
(CUSIP Number of
Class of Securities)
Steve Putman
Senior
Vice President, General Counsel, and Secretary
1001 Fannin Street
Suite 2020
Houston,
Texas 77002
(713) 445-3200
(Name, address, and telephone number of persons authorized to receive notices and communications on behalf of filing person)
Copies to:
Mike
Rosenwasser
Brenda Lenahan
Vinson & Elkins L.L.P.
666 Fifth Avenue, 26th Floor
New York, New York 10103
Tel: (212) 237-0000
Fax:
(212) 237-0100
CALCULATION OF FILING FEE
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Transaction value(1) |
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Amount of filing fee(2) |
$117,963,000 |
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$11,879 |
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(1) |
The transaction value is estimated only for purposes of calculating the filing fee. This amount is based on the offer to purchase up to 117,963 Series A Preferred Units, par value $1,000.00 per unit, at the minimum
tender offer price of $1,000.00 per unit. |
(2) |
The amount of the filing fee, calculated in accordance with Rule 0-11 under the Securities Exchange Act of 1934, as amended, equals $100.70 per $1,000,000 of the value of the transaction. |
¨ |
Check the box if any part of the fee is offset, as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing. |
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Amount Previously Paid: |
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Not applicable. |
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Filing Party: |
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Not applicable. |
Form or Registration No.: |
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Not applicable. |
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Date Filed: |
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Not applicable. |
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Check the box if filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
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third-party tender offer subject to Rule 14d-1. |
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issuer tender offer subject to Rule 13e-4. |
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going-private transaction subject to Rule 13e-3. |
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amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the results of the tender offer: ¨
If applicable, check the appropriate box(es) below to designate the appropriate rule
provision(s) relied upon:
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Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
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Rule 14d-1(d) (Cross-Border Third Party Tender Offer) |
Introductory Statement
This Tender Offer Statement on Schedule TO (this Schedule TO) is being filed by Black Stone Minerals, L.P., a Delaware limited partnership (the
Partnership), and relates to the offer by the Partnership to purchase for cash up to 100% of its outstanding Series A Preferred Units at 100% of the par value of $1,000.00 per unit, plus any unpaid yield accrued through the termination
date. The Partnerships offer is being made upon the terms and subject to the conditions set forth in the Offer to Purchase dated November 6, 2015 (the Offer to Purchase) and in the related Letter of Transmittal (the
Letter of Transmittal), copies of which are filed with this Schedule TO as Exhibits (a)(1)(A) and (a)(1)(B), respectively. This Schedule TO is intended to satisfy the reporting requirements of Rule 13e-4(c)(2) under the Securities
Exchange Act of 1934, as amended. The information contained in the Offer to Purchase and the related Letter of Transmittal is incorporated herein by reference in response to Items 1 through 11 of this Schedule TO.
Item 1. Summary Term Sheet.
The information set
forth in the section of the Offer to Purchase entitled Summary Term Sheet is incorporated herein by reference.
Item 2. Subject
Company Information.
(a) Name and Address.
The
name of the subject company (and issuer of the securities to which this Schedule TO relates) is Black Stone Minerals, L.P., a Delaware limited partnership. The principal executive offices of the Partnership are located at 1001 Fannin Street, Suite
2020, Houston, Texas 77002. The Partnerships business telephone number is (713) 445-3200. The information set forth in Section 9 Certain Information Concerning the Partnership of the Offer to Purchase is
incorporated herein by reference.
(b) Securities.
The information set forth in the section of the Offer to Purchase entitled Introduction is incorporated herein by reference.
(c) Trading Market and Price.
The information set forth
in Section 6 Purpose of the Offer of the Offer to Purchase is incorporated herein by reference.
Item 3. Identity and
Background of Filing Person.
(a) Name and Address.
This Schedule TO is an issuer tender offer made by the Partnership, which is both the filing person and the subject company. The business address and telephone
number of the Partnership are set forth under Item 2(a) above. The information set forth in Section 9 Certain Information Concerning the Partnership and Section 10 Interests of Directors and Executive
Officers; Transactions and Arrangements Concerning the Preferred Units of the Offer to Purchase is incorporated herein by reference.
Item 4. Terms of the Transaction.
(a) Material
Terms.
The information set forth in the sections of the Offer to Purchase entitled Summary Term Sheet and Introduction is
incorporated herein by reference. The information set forth in Section 1 Terms of the Offer; Extension of the Offer; Amendment, Section 2 Acceptance for Payment and Payment for Preferred Units,
Section 3 Procedures for Tendering Preferred Units; Backup Withholding, Section 4 Rights of Withdrawal,
2
Section 6 Purpose of the Offer, Section 7 Certain U.S. Federal Income Tax Consequences of the Offer, Section 10 Interests of
Directors and Executive Officers; Transactions and Arrangements Concerning the Preferred Units and Section 12 Certain Conditions to the Offer of this Offer to Purchase is incorporated herein by reference.
(b) Purchases.
The information set forth in the section
of the Offer to Purchase entitled Introduction and in Section 10 Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Preferred Units of the Offer to Purchase is incorporated
herein by reference.
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
(e) Agreements Involving the Subject Companys Securities.
The information set forth in Section 10 Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Preferred
Units of the Offer to Purchase is incorporated herein by reference.
Item 6. Purposes of the Transaction and Plans or Proposals.
(a) Purposes.
The information set forth in the section of
the Offer to Purchase entitled Summary Term Sheet and in Section 6 Purpose of the Offer of the Offer to Purchase is incorporated herein by reference.
(b) Use of Securities Acquired.
The information set
forth in the section of the Offer to Purchase entitled Introduction is incorporated herein by reference.
(c) Plans.
Not applicable.
Item 7. Source and Amount of Funds or
Other Consideration.
(a) Source of Funds.
The
information set forth in Section 5 Source and Amount of Funds of the Offer to Purchase is incorporated herein by reference.
(b) Conditions.
Not applicable. The information set
forth in Section 5 Source and Amount of Funds and Section 12 Certain Conditions to the Offer of the Offer to Purchase is incorporated herein by reference.
(d) Borrowed Funds.
The information set forth in
Section 5 Source and Amount of Funds of the Offer to Purchase is incorporated herein by reference.
3
Item 8. Interest in Securities of the Subject Company.
(a) Securities Ownership.
The information set forth in
Section 10 Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Preferred Units of the Offer to Purchase is incorporated herein by reference.
(b) Securities Transactions.
The information set forth
in Section 10 Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Preferred Units of the Offer to Purchase is incorporated herein by reference.
Item 9. Persons/Assets, Retained, Employed, Compensated or Used.
(a) Solicitations or Recommendations.
The information set
forth in Section 13 Fees and Expenses of the Offer to Purchase is incorporated herein by reference.
Item 10. Financial
Statements.
(a) Financial Information.
Not
applicable.
(b) Pro Forma Information.
Not
applicable.
Item 11. Additional Information.
(a) Agreements, Regulatory Requirements, and Legal Proceedings.
The information set forth in Section 8 Distributions on the Preferred Units, Section 10 Interests of Directors and
Executive Officers; Transactions and Arrangements Concerning the Preferred Units, Section 11 Certain Legal Matters; Regulatory Approvals, and Section 14 Miscellaneous of the Offer to Purchase is
incorporated herein by reference.
(b) Other Material Information.
The information set forth in the Offer to Purchase and the related Letter of Transmittal, copies of which are filed with this Schedule TO as Exhibits (a)(1)(A)
and (a)(1)(B), respectively, are incorporated herein by reference.
Item 12. Exhibits.
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Exhibit Number |
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Description |
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(a)(1)(A) |
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Offer to Purchase dated November 6, 2015 |
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(a)(1)(B) |
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Letter of Transmittal |
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(a)(2) |
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Not applicable |
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(a)(3) |
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Not applicable |
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(a)(4) |
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Not applicable |
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(a)(5)(A) |
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Press release dated November 6, 2015 |
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(b)(1) |
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Third Amended and Restated Credit Agreement among Black Stone Minerals Company, L.P., as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, Bank of America, N.A. and Compass Bank, as Co-Syndication Agents,
Wells Fargo Bank, N.A. and Amegy Bank National Association, as Co-Documentation Agents, and a syndicate of lenders dated as of January 23, 2015 (incorporated herein by reference to Exhibit 10.2 to Black Stone Minerals, L.P.s Registration
Statement on Form S-1 filed on March 19, 2015 (SEC File No. 333-202875)) |
4
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(b)(2) |
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First Amendment to Third Amended and Restated Credit Agreement, dated as of October 28, 2015, among Black Stone Minerals Company, L.P., as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, Bank of
America, N.A. and Compass Bank, as Co-Syndication Agents, Wells Fargo Bank, N.A. and Amegy Bank National Association, as Co-Documentation Agents, and a syndicate of lenders (incorporated herein by reference to Exhibit 10.1 to Black Stone Minerals,
L.P.s Current Report on Form 8-K filed on October 29, 2015 (SEC File No. 001-37362)) |
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(d)(1) |
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Black Stone Minerals, L.P. Long-Term Incentive Plan, dated May 6, 2015, by Black Stone Minerals GP, L.L.C. (incorporated herein by reference to Exhibit 10.1 Black Stone Minerals, L.P.s Current Report on Form 8-K filed on
May 6, 2015 (SEC File No. 001-37362)) |
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(d)(2) |
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Form of IPO Award Grant Notice and Award Agreement for Senior Management (Restricted Units) (incorporated herein by reference to Exhibit 10.9 to Black Stone Minerals, L.P.s Registration Statement on Form S-1 filed on
April 13, 2015 (SEC File No. 333-202875)) |
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(d)(3) |
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Form of IPO Award Grant Notice and Award Agreement for Senior Management (Performance Units) (incorporated herein by reference to Exhibit 10.10 to Black Stone Minerals, L.P.s Registration Statement on Form S-1 filed on
April 13, 2015 (SEC File No. 333-202875)) |
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(d)(4) |
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Form of Non-Employee Director Unit Grant Notice and Award Agreement (incorporated herein by reference to Exhibit 10.11 to Black Stone Minerals, L.P.s Registration Statement on Form S-1 filed on April 13, 2015 (SEC File No. 333-202875)) |
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(d)(5) |
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Form of Severance Agreement for Thomas L. Carter, Jr. (incorporated herein by reference to Exhibit 10.12 to Black Stone Minerals, L.P.s Registration Statement on Form S-1 filed on April 13, 2015 (SEC File No.
333-202875)) |
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(d)(6) |
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Form of Severance Agreement for Senior Vice Presidents (incorporated herein by reference to Exhibit 10.13 to Black Stone Minerals, L.P.s Registration Statement on Form S-1 filed on April 13, 2015 (SEC File No.
333-202875)) |
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(g) |
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Not applicable |
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(h) |
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Not applicable |
5
SIGNATURES
After due 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.
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BLACK STONE MINERALS, L.P. |
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By: |
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Black Stone Minerals GP, L.L.C., its general
partner |
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Date: November 6, 2015 |
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By: |
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/s/ Steve Putman |
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Steve Putman |
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Senior Vice President, General Counsel, and Corporate Secretary |
6
Exhibit Index
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Exhibit Number |
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Description |
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(a)(1)(A) |
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Offer to Purchase dated November 6, 2015 |
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(a)(1)(B) |
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Letter of Transmittal |
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(a)(2) |
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Not applicable |
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(a)(3) |
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Not applicable |
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(a)(4) |
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Not applicable |
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(a)(5)(A) |
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Press release dated November 6, 2015 |
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(b)(1) |
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Third Amended and Restated Credit Agreement among Black Stone Minerals Company, L.P., as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, Bank of America, N.A. and Compass Bank, as Co-Syndication Agents,
Wells Fargo Bank, N.A. and Amegy Bank National Association, as Co-Documentation Agents, and a syndicate of lenders dated as of January 23, 2015 (incorporated herein by reference to Exhibit 10.2 to Black Stone Minerals, L.P.s Registration
Statement on Form S-1 filed on March 19, 2015 (SEC File No. 333-202875)) |
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(b)(2) |
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First Amendment to Third Amended and Restated Credit Agreement, dated as of October 28, 2015, among Black Stone Minerals Company, L.P., as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, Bank of America,
N.A. and Compass Bank, as Co-Syndication Agents, Wells Fargo Bank, N.A. and Amegy Bank National Association, as Co-Documentation Agents, and a syndicate of lenders (incorporated herein by reference to Exhibit 10.1 to Black Stone Minerals,
L.P.s Current Report on Form 8-K filed on October 29, 2015 (SEC File No. 001-37362)) |
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(d)(1) |
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Black Stone Minerals, L.P. Long-Term Incentive Plan, dated May 6, 2015, by Black Stone Minerals GP, L.L.C. (incorporated herein by reference to Exhibit 10.1 Black Stone Minerals, L.P.s Current Report on Form 8-K filed on
May 6, 2015 (SEC File No. 001-37362)) |
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(d)(2) |
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Form of IPO Award Grant Notice and Award Agreement for Senior Management (Restricted Units) (incorporated herein by reference to Exhibit 10.9 to Black Stone Minerals, L.P.s Registration Statement on Form S-1 filed on
April 13, 2015 (SEC File No. 333-202875)) |
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(d)(3) |
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Form of IPO Award Grant Notice and Award Agreement for Senior Management (Performance Units) (incorporated herein by reference to Exhibit 10.10 to Black Stone Minerals, L.P.s Registration Statement on Form S-1 filed on
April 13, 2015 (SEC File No. 333-202875)) |
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(d)(4) |
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Form of Non-Employee Director Unit Grant Notice and Award Agreement (incorporated herein by reference to Exhibit 10.11 to Black Stone Minerals, L.P.s Registration Statement on Form S-1 filed on April 13, 2015 (SEC File No.
333-202875)) |
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(d)(5) |
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Form of Severance Agreement for Thomas L. Carter, Jr. (incorporated herein by reference to Exhibit 10.12 to Black Stone Minerals, L.P.s Registration Statement on Form S-1 filed on April 13, 2015 (SEC File No.
333-202875)) |
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(d)(6) |
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Form of Severance Agreement for Senior Vice Presidents (incorporated herein by reference to Exhibit 10.13 to Black Stone Minerals, L.P.s Registration Statement on Form S-1 filed on April 13, 2015 (SEC File No.
333-202875)) |
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(g) |
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Not applicable |
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(h) |
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Not applicable |
7
Exhibit (a)(1)(A)
OFFER TO PURCHASE
BLACK
STONE MINERALS, L.P.
DATED NOVEMBER 6, 2015
OFFER TO PURCHASE FOR CASH UP TO 100% OF BLACK STONE MINERALS, L.P.S
OUTSTANDING SERIES A PREFERRED UNITS (THE PREFERRED UNITS) AT 100% OF THE
PAR VALUE OF $1,000.00 PER UNIT, PLUS ANY UNPAID YIELD ACCRUED THROUGH THE
TERMINATION DATE
THE
OFFER WILL TERMINATE AT 5:00 P.M., NEW YORK CITY TIME, ON DECEMBER 10, 2015,
UNLESS THE OFFER IS EXTENDED (THE TERMINATION
DATE).
THIS OFFER TO PURCHASE AND THE ACCOMPANYING LETTER OF TRANSMITTAL (THE LETTER OF TRANSMITTAL AND, TOGETHER
WITH THIS OFFER TO PURCHASE, THE OFFER) IS BEING MADE TO ALL HOLDERS OF PREFERRED UNITS (THE PREFERRED UNITHOLDERS).
NONE OF BLACK STONE MINERALS, L.P. (THE PARTNERSHIP), BLACK STONE MINERALS GP, L.L.C. (THE GENERAL PARTNER), OR THE
BOARD OF DIRECTORS OF THE GENERAL PARTNER MAKES ANY RECOMMENDATION AS TO WHETHER OR NOT TO TENDER UNITS IN THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE
CONTAINED HEREIN AND IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE PARTNERSHIP, THE GENERAL PARTNER, OR THE GENERAL PARTNERS BOARD OF DIRECTORS.
AS OF THE DATE OF THIS OFFER, THE PARTNERSHIP HAS BEEN ADVISED THAT OF THE 32,395 PREFERRED UNITS BENEFICIALLY OWNED BY DIRECTORS OR EXECUTIVE OFFICERS OF THE GENERAL PARTNER, APPROXIMATELY 8,363 WILL BE TENDERED PURSUANT TO THE OFFER. THESE 8,363
UNITS REPRESENT 25.8% OF THE PREFERRED UNITS BENEFICIALLY OWNED BY THE GENERAL PARTNERS DIRECTORS AND EXECUTIVE OFFICERS AND 7.1% OF THE OUTSTANDING PREFERRED UNITS. HOWEVER, THESE DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER ARE
NOT OBLIGATED TO TENDER THEIR PREFERRED UNITS IN THE OFFER AND MAY SUBSEQUENTLY ELECT NOT TO TENDER SOME OR ALL OF SUCH PREFERRED UNITS IN THE OFFER. FURTHERMORE, DIRECTORS OR EXECUTIVE OFFICERS THAT PREVIOUSLY ADVISED THE PARTNERSHIP OF THEIR
INTENTION NOT TO TENDER MAY SUBSEQUENTLY ELECT TO TENDER SOME OR ALL OF THEIR PREFERRED UNITS IN THE OFFER.
THIS OFFER HAS NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE FAIRNESS OR MERITS OF SUCH OFFER OR ON THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
IMPORTANT
Any Preferred Unitholder who wants to tender any portion of such holders Preferred Units to the Partnership should complete and deliver
the Letter of Transmittal and any other required documents as set forth in Section 3 of this Offer prior to the Termination Date. The Partnership reserves the absolute right to reject Preferred Units determined not to be tendered in appropriate
form.
Questions about how to tender your Preferred Units and requests for additional copies of this Offer to Purchase and the Letter of
Transmittal may be directed to American Stock Transfer and Trust Company, LLC (the Depositary) in the manner set forth on the last page of this Offer to Purchase.
To tender your Preferred Units, you must follow the procedures described in this Offer to
Purchase, the Letter of Transmittal and the other documents related to the Offer. If you do not wish to tender your Preferred Units, you need not take any action.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY
BEFORE YOU MAKE A DECISION WITH RESPECT TO THE OFFER.
November 6, 2015
TABLE OF CONTENTS
SUMMARY TERM SHEET
SECURITIES SOUGHT |
Up to 100% of the Partnerships Preferred Units |
PRICE OFFERED PER UNIT |
100% of the par value of $1,000.00 per Preferred Unit, plus any unpaid yield accrued through the Termination Date |
SCHEDULED TERMINATION DATE |
December 10, 2015, or such later date as the Offer may be extended |
PURCHASER |
Black Stone Minerals, L.P. |
This section of the Offer answers some of the questions you may have relating to the Offer.
You should carefully read this Offer to Purchase and the Letter of Transmittal in their entirety, because the information in this summary term sheet is not complete, and additional important information is contained in the Offer to Purchase and the
Letter of Transmittal. You should also review the sections of the First Amended and Restated Limited Partnership Agreement of the Partnership (the Partnership Agreement) that relate to the Preferred Units, because the Partnership
Agreement defines your and the Partnerships rights and obligations with respect to the Preferred Units. Those rights and obligations are not affected by this Offer, but they may be relevant to your decision whether or not to tender your
Preferred Units.
What is the Offer?
The Board of Directors of the General Partner has authorized the Partnership to conduct a tender offer to purchase for cash up to 100% of the
Partnerships Preferred Units, par value $1,000.00 per unit, at 100% of the par value of $1,000.00 per unit, plus any unpaid yield accrued through the Termination Date, upon specified terms and subject to certain conditions set forth in
the tender offer documents. The Preferred Units are not listed on any securities exchange, and there is no established trading market for the Preferred Units.
Why is the Partnership making the Offer?
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Purchasing the Preferred Units will be immediately accretive to the Partnerships common and subordinated unitholders. |
The Preferred Units currently yield 10% per year and, without any action by the holders of Preferred Units, will convert into common and
subordinated units of the Partnership over the next three years. The issuance of these additional common and subordinated units would increase the total number of units entitled to any distributions paid by the Partnership. If you assume:
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the Partnership were to pay the full Minimum Quarterly Distribution (as defined in the Partnership Agreement) on all common and subordinated units during the subordination period, including those issued upon mandatory
conversion of the Preferred Units; |
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the holders of the Preferred Units did not exercise their options to convert or redeem the Preferred Units; |
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the Partnership timely pays the yield on the Preferred Units; and |
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the yield on the Preferred Units does not exceed 10% as a result of participation in distributions or default by the Partnership; |
then the currently outstanding Preferred Units would receive an aggregate of approximately $40.9 million in preferred yield and common and subordinated unit
distributions during the period between October 1, 2015 and March 31, 2019. The distributions would be generally payable as follows (in thousands):
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4Q 2015 |
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2016 |
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2017 |
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2018 |
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1Q 2019 |
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Preferred Unit Distributions |
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$ |
2,973 |
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$ |
8,861 |
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$ |
4,918 |
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$ |
991 |
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$ |
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Common Unit Distributions |
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1,312 |
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2,863 |
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4,653 |
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1,208 |
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Subordinated Unit Distributions |
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1,719 |
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3,751 |
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6,095 |
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1,582 |
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Total Distributions |
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$ |
2,973 |
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$ |
11,892 |
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$ |
11,532 |
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$ |
11,739 |
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$ |
2,790 |
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1
Because the Partnership will fund the purchase of the Preferred Units tendered in response to this Offer with
borrowings under its revolving credit facility or cash on hand, the Partnership expects that the purchase will be approximately 8% accretive to its common and subordinated unitholders.
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Purchasing the Preferred Units will provide liquidity to holders who tender their Preferred Units. |
The Preferred Units are subject to transfer restrictions under the Partnership Agreement, are not listed on any securities exchange, and are
not actively traded in any other established market. Consequently, the liquidity of the Preferred Units is extremely limited.
As the
Preferred Units convert into common and subordinated units over time, the Preferred Unitholders liquidity position should improve, because the Partnerships common units are publicly listed on the New York Stock Exchange
(NYSE), where they are traded under the ticker BSM, and the Partnership expects that they will continue to be listed for the foreseeable future. But the subordinated unitsinto which the Preferred Units are partially
convertibleare, like the Preferred Units, subject to transfer restrictions, not listed on any securities exchange, and not actively traded in any other established market. The subordinated units will only become liquid if the subordination
period expires, causing the subordinated units to convert into common units.
Holders of the Preferred Units may also improve their
liquidity position by exercising an annual option to redeem a portion of their Preferred Units, but the amount that may be redeemed each year is limited by the Partnership Agreement.
None of the Partnership, the General Partner, or the General Partners Board of Directors has made any recommendation to any Preferred
Unitholder about whether to tender or refrain from tendering the Preferred Units. Preferred Unitholders are urged to evaluate carefully all information in the tender offer documents, consult their own investment and tax advisers, and make their own
decisions whether to tender or refrain from tendering their Preferred Units.
If I do not want to tender in the Offer, what are my other options?
This Offer is in addition to the following options available to you under the Partnership Agreement:
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You may convert some or all of your Preferred Units into a combination of common and subordinated units at any time. |
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Each year, between November 1 of that year and March 31 of the following year, you may elect to redeem a portion of your Preferred Units for cash (subject to a reciprocal redemption option that may be
exercised by the Partnership). |
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You may do nothing, in which case a portion of your Preferred Units will automatically convert into a combination of common and subordinated units each year until they are fully converted. |
If I choose to exercise my option to convert or am subject to mandatory conversion, what will I receive?
You will receive a combination of common and subordinated units determined by applying the conversion rates defined in Section 5(a) in
Annex A to the Partnership Agreement. As of the date of this Offer, each Preferred Unit would be converted into 30.3431 common units and 39.7427 subordinated units. For example, if you owned 100 Preferred Units and exercised your option to convert
all your Preferred Units, you would receive 3,034 common units and 3,974 subordinated units (as well as cash in lieu of the fractional units).
What
are the relative values of tendering in this Offer, redemption, and conversion?
Tendering in this Offer
If you tender in this Offer, you will receive a cash amount equal to $1,000.00 per Preferred Unit that you tender and that is accepted by us,
plus any unpaid yield accrued from October 1, 2015 through the Termination Date.
2
Redemption
If you exercise your right to redeem a portion of your Preferred Units, the redemption will be effective as of December 31, 2015, whether
you give notice prior to December 31, 2015 or before March 31, 2016 and you will receive a cash amount equal to $1,000.00 per Preferred Unit that you redeem.
In addition, if the Partnership exercises its option to redeem additional Preferred Units from you, up to the number of Preferred Units that
you redeemed, you will receive a cash amount equal to the greater of $1,000.00 per Preferred Unit or the fair market value of the common and subordinated units into which the Preferred Units would be convertible.
Conversion
If your
Preferred Units are converted, you will receive a combination of common and subordinated units rather than cash, and the value of those units will not be fixed until you liquidate them.
Valuation of Common Units. The Partnerships common units are traded on the NYSE under the ticker BSM. Due to the
limited float of the common units, which can result in relatively low trading volume and wide bid-ask spreads, the quoted price of the common units may display significant volatility. In addition, you may not be able to sell your common units at the
quoted prices, especially if you are selling a significant amount of common units. Between the Partnerships initial public offering on May 1, 2015 and November 2, 2015, the closing price of the Partnerships common units has
ranged from $12.51 to $18.20, and the 30-day volume-weighted average price of the common units was $13.96 as of November 2, 2015.
Valuation of Subordinated Units. The subordinated units are not exchange-listed and do not trade on an established market.
Consequently, it is not possible to ascertain the price at which the subordinated units would actually trade in a liquid market. The subordinated units are derivatives of the Partnerships common units, because they will convert into common
units on a 1:1 basis in the future if the Partnership meets specified financial tests that are described in the Partnership Agreement. The market value of the common units should provide some insight into the value of the subordinated units. The
maximum value of the subordinated units is the value of the common units, but the subordination of the subordinated units relative to the common units and the lack of liquidity and uncertainty regarding conversion, among several other key risk
factors, imply a discount to the value of the common units.
In September 2015, the Partnership learned that Stout Risius Ross,
Inc. (SRR), a third-party consultant, had prepared a valuation of the subordinated units as of June 30, 2015 on behalf of certain holders of the Partnerships subordinated units in connection with their financial reporting
requirements only and was not rendered for use in making a decision to buy, sell or convert any security in the Partnership. To ensure that all holders of the Preferred Units would have access to similar information for purposes of this Offer, the
Partnership retained SRR to update its valuation. Under the terms of the engagement, SRR has authorized the Partnership to reproduce the following summary of SRRs report, which is subject to all acknowledgements, disclaimers, assumptions and
limiting conditions set forth in the report, certain of which are summarized below.
The Partnership retained SRR in connection with this
Offer based on SRRs reputation and experience, including experience in providing valuation services to and concerning the Partnership. SRR is a nationally recognized investment banking and business valuation firm with expertise in, among other
things, valuing businesses and securities. SRR has received a customary fee in connection with the preparation and issuance of its report and will be reimbursed for its reasonable expenses. In addition, the Partnership has agreed to indemnify SRR
and related persons and entities for certain liabilities that may relate to, or arise out of, its engagement, including liabilities under federal securities laws. SRRs compensation is not dependent on the results of its analysis or the success
or completion of the Offer. During the two years preceding the date of its report, SRR has provided valuation and financial advisory services to, and has received customary compensation from, the Partnership and certain of its current and former
partners.
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Summary of SRR Report.
SRR was retained solely to provide an estimation of the fair market value of the subordinated units, and was not retained for any other
purpose and did not prepare any analysis as to the value of the Preferred Units or the common units. Further, SRR was not engaged to, and did not, provide a fairness opinion with respect to the Offer, the price of the Preferred Units or otherwise.
SRRs estimation of the fair market value of the subordinated units is applicable for the stated date and purpose only, and is not appropriate for any other date or purpose. The estimation is only being provided by the Partnership in this Offer
for informational purposes. SRRs estimation should not be relied upon by any other person for making an investment decision concerning the Preferred Units, the common units, the subordinated units or any other security issued by the
Partnership. Specifically, the estimation is not investment advice and in no way should be construed as such. SRR has not consented to be named as an expert for purposes of the federal securities laws, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Fair market value of the subordinated units for the purposes of SRRs analysis is
defined as the price at which the units would trade hands between a willing buyer and a willing seller, neither having compulsion to buy or sell and both having reasonable knowledge of relevant facts, subject to the qualifications on SRRs
estimation described below. SRRs analysis is based on the business, economic, market, and other conditions as they existed as of October 28, 2015. Although subsequent events may affect its concluded estimations, SRR has no obligation to
update or revise its estimation. Also, SRR did not attempt to confirm whether the Partnership had good title to its assets, and SRR did not conduct, nor was it provided with, a valuation or appraisal of any of the Partnerships assets or
liabilities. The following represents a brief overview of the methodology SRR employed in deriving its estimation. Such overview does not purport to be a complete description of the analysis or report provided to the Partnership.
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In connection with its analysis, SRR made such reviews, analyses, and inquiries as it deemed necessary and appropriate under the circumstances. The principal sources of information used in performing the SRR analysis
included, but were not limited to the Partnerships Form 10-Q for the period ended June 30, 2015; |
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the Partnerships Form S-1 and Amendments dated April 2015; |
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the Partnerships publicly available investor presentations and other press releases issued by the Partnership prior to the date of measurement; |
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analyst research reports with respect to the Partnership and as provided by the Partnership; |
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publicly available financial data of certain publicly traded companies deemed relevant; and |
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publicly available financial data with respect to commodity and energy prices, both historical and projected, obtained from sources deemed reliable. |
Since SRR had only used publicly available information in preparing similar reports for holders of our subordinated units, the Partnership
requested that SRR only use publicly available information for the report prepared for the Partnership. Therefore, the most recent historical financial information for the Partnership available to SRR was the Partnerships Form 10-Q filing as
of June 30, 2015. SRRs estimation of the fair market value of the subordinated units is qualified as being based on such limited information, which SRR assumed to be accurate in all respects. SRRs analysis may have resulted in
materially higher or lower value estimations of the subordinated units if the Partnership management provided SRR with its projected financial statements or other material information.
In arriving at its conclusions, SRR considered several widely accepted valuation approaches, including various forms of the income approach
and market approach. In this instance, SRR employed a form of the
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income approach, the discounted cash flow method, in its analysis of the subordinated units. SRR also utilized a form of the market approach, where application of the discounted cash flow method
calibrates the value of all unit classes such that the value indication for the common units equals the publicly traded price as of the relevant date of measurement. Additionally, the subordinated units maintain certain unique attributes, including
but not limited to the following: (i) the subordinated units are junior to the common and Preferred Units with respect to distribution preference, (ii) the subordinated units are convertible into common units at a future uncertain date at
a ratio that may vary based on levels of future distributions to common and subordinated units and (iii) the subordinated units, unlike the common units, lack liquidity as the subordinated units are not publicly traded on an established
exchange. Based on these factors and other considerations, SRR utilized a Monte Carlo analysis within its application of the discounted cash flow method in order to incorporate a wide range of scenarios of future cash flow for the Partnership,
thereby capturing the asymmetric nature of potential future distributions to the Partnerships unit classes and inherent derivative nature of the subordinated units relative to other unit classes. SRR selected this method of valuation because
it believed it was a reasonable approach considering the characteristics of the subordinated units.
A Monte Carlo analysis is a
computational algorithm that relies on repeated random sampling to acquire numerical results, where a large number of simulations is needed in order to sample the distribution of an unknown probabilistic entity. A Monte Carlo analysis then relies on
the law of large numbers, according to which the average of the results obtained from a large number of trials relates to an expected value. In its analysis, SRR performed the following procedures:
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Simulated varying levels of cash generated from operations for the Partnership on a quarterly basis through March 31, 2019 using a widely accepted mathematical framework for modeling future variability in the
prices of financial assets; |
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Allocated the simulated level of available cash generated from operations to the Partnerships unit classes based on the rights and preferences of each security class; |
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Calculated a terminal value for the Partnerships total equity as of March 31, 2019 and allocated it to the Partnerships unit classes after giving effect to (i) assumed conversion or redemption of
the Preferred Units and (ii) assumed conversion of the subordinated units into common units, where such conversion ratio varies based on levels of future distributions to the common and subordinated units, subject to a maximum conversion ratio
of subordinated to common units of 1:1. |
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Discounted the various levels of cash flow allocable to the Partnerships unit classes to present value as of the measurement date; |
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Calibrated a risk adjustment such that the resulting value of the common units is equal to the publicly-traded price as of the measurement date; and |
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Calculated a discount for lack of marketability applicable to the subordinated units to account for illiquidity associated with the fact that the subordinated units are not exchange-listed and do not trade on an
established market. |
SRRs analysis is based on 10,000 simulation paths for the Partnerships quarterly cash
generated from operations through March, 31, 2019. Cash generated from operations was simulated using a Geometric Brownian Motion framework, which relies on the following key assumptions:
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Projections for the Partnerships Cash Generated from Operations: Expected base case levels of cash generated from operations through March 31, 2019 represent the average of all simulation paths
in SRRs Monte Carlo analysis. Base case levels of cash generated from operations are based on SRRs review of publicly available information and are necessarily based on estimates for future commodity prices of oil and natural gas. SRR
obtained estimates of future oil and natural gas prices from sources deemed reliable, including consensus commodity price forecasts for years 2016 to 2018 reported by Bloomberg Finance L.P. as of October 27, 2015 and strip data from the New
York Mercantile Exchange, and considered such estimates in its base case cash flow projections for the Partnership. |
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Volatility for the Partnerships Cash Generated from Operations: SRRs Monte Carlo analysis requires an estimate of the future variability in cash generated from operations of the Partnership. In order
to calculate the appropriate volatility for the simulation of the Partnerships cash generated from operations, SRR considered several factors, including (i) volatility of historical cash from operations of certain public companies
operating in the Partnerships industry, (ii) volatility of historical natural gas and oil prices, and (iii) volatility of the Partnerships historical cash from operations. SRR also considered the fact that the Partnership
hedges a certain portion of its exposure to future changes in commodity prices and adjusted estimated levels of future volatility accordingly. |
SRRs Monte Carlo analysis takes into consideration a wide range of potential future cash flow levels of the Partnership in order to
analyze various risks specific to the subordinated units relative to the common units, including but not limited to the following: (i) the subordinated units MQD is junior in priority to that of the common units, (ii) the subordinated
units MQD does not accrue arrearages if it is not paid in any period, and (iii) the subordinated units may convert to common units at a ratio of less than 1:1 if certain specified financial tests are not achieved. SRR also considered the impact
of the future mandatory conversion or optional redemption of the Partnerships Preferred Units on the value of both the subordinated and common units and incorporated these potential scenarios in its conclusions. SRRs approach values both
the common and subordinated units, and the analysis is calibrated such that the implied value of the common units equals BSMs October 28, 2015 closing price of $13.07. Finally, SRRs analysis incorporates a discount for lack of
marketability applicable to the subordinated units ranging from 8.0% to 9.5% before arriving at a final estimate of value.
SRRs
analysis was prepared with publicly available information only, and the Partnerships management did not consult with SRR regarding the valuation. On this basis, SRR concluded that the range of values for the subordinated units was between
$5.90 and $8.40 per unit, as of October 28, 2015.
Analysis Prepared by the Partnership Based on the SRR Analysis
Based on the closing price of the Partnerships common units of $13.07 on October 28, 2015, SRRs analysis represents a
discount to the common units ranging from 36% to 55%. The assumptions underlying a valuation of this sort have a significant effect on the outcome. Because the Partnership did not express a view on the assumptions made by SRR in its analysis and
did not provide SRR with non-public information, the Partnership cautions the unitholders against relying on it in making a decision whether or not to tender in this Offer.
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The chart below, prepared by the Partnership, shows the effect of different common unit prices on
an as-converted Preferred Unit, using two valuation metrics for the subordinated units: a discounted subordinated unit value, reflecting discounts to the common unit price ranging from 36% to 55%, and an undiscounted valuation,
reflecting the maximum theoretical value of the subordinated units. As described earlier, SRRs estimation is applicable solely for its stated date, as of October 28, 2015, and changes in the underlying variables that influence the trading
price of the common units may materially change the relationship in the value of the subordinated units relative to the common units. Partnership management prepared such charts for illustrative purposes only and the values below are indicative only
and do not take into account a number of factors that would bear on the actual value realized upon conversion or tender, including timing considerations, distributions, and the relative tax consequences of owning a Preferred Unit versus owning
common and subordinated units. For example, expectations of higher cash flow coverage for the common units, all else being equal, would likely increase the value of the subordinated units relative to the traded price of the common units.
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As depicted in Partnership managements illustration above, the common unit prices where the
Nominal, Discounted (High), and Discounted (Low) lines intersect the Tender line are the break-even prices: at those price, the value of the combined as-converted common and subordinated
units under the relevant discount assumptions equal the proposed tender consideration, without taking into account any future distributions. For example, if the common units are trading at $14.27 and the subordinated units are not discounted, a
Preferred Unit would have the same instantaneous value as the approximately 30 common units and 39 subordinated units into which that Preferred Unit is convertible. Using the range of discounts of 36% to 55% implied by the SRR report as of
October 28, 2015, the Partnership illustratively calculated a break-even price range of $17.89 to $20.71. The following chart shows the change in the break-even price under different discount assumptions for the subordinated units:
How will Preferred Units purchased in this Offer affect subsequent redemptions and conversions of Preferred Units
pursuant to the Partnership Agreement?
With respect to redemptions and conversions of Preferred Units pursuant to the Partnership
Agreement that occur subsequent to the Offer, Preferred Units purchased in the Offer will be treated as having been previously redeemed or converted for purposes of determining the number of Preferred Units subject to mandatory conversion or
available for redemption.
Are there conditions to the Offer?
The Offer is subject to certain conditions as described in Section 12 of this Offer to Purchase.
When will the Offer terminate, and may the offer be extended?
The Offer will terminate at 5:00 p.m., New York City time, on December 10, 2015, unless extended. The Partnership may extend the period of
time the Offer will be open by issuing a press release or making some other public announcement by no later than 9:00 a.m., New York City time, on the next business day after the Offer otherwise would have terminated. See Section 1 of this
Offer to Purchase.
You have until the termination of the Offer to decide whether to tender your Preferred Units in the Offer.
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How do I tender my Preferred Units?
To tender your Preferred Units in the Offer, you must deliver the Letter of Transmittal and any other required documents to the Depositary no
later than the time the Offer terminates. See Section 3 of this Offer, which describes procedures for tendering your Preferred Units.
Is there
any cost to me to tender?
No fees or commission will be payable to the Partnership in connection with the Offer.
May I withdraw my Preferred Units after I have tendered and, if so, by when?
Yes; you may withdraw your Preferred Units at any time prior to the Termination Date.
A withdrawal may not be rescinded, but withdrawn Preferred Units may be re-tendered by following the tender procedures before the Offer
terminates. See Section 3 of this Offer to Purchase.
How do I withdraw previously tendered Preferred Units?
A written notice of withdrawal of tendered Preferred Units must be timely received by the Depositary, and must specify the name of the
Preferred Unitholder who tendered the Preferred Units and the number of Preferred Units being withdraw. Any notice of withdrawal must also specify the name and number of the account at American Stock Transfer and Trust Company, LLC, as the transfer
agent for the Preferred Units, to be credited with the withdrawn Preferred Units. See Section 4 of this Offer to Purchase.
May I place any
condition on my tender of Preferred Units?
No.
Is there a limit on the number of Preferred Units I may tender?
No.
Must I tender all of my Preferred Units
for repurchase?
No; you may tender for repurchase all or part of the Preferred Units you own.
Does the Partnership have the financial resources to make payment?
Assuming the Partnership purchases 100% of its outstanding Preferred Units at 100% of the par value of $1,000.00 per Preferred Unit, the total
cost, not including fees and expenses incurred in connection with the Offer, will be approximately $117,963,000, plus any unpaid yield accrued through the Termination Date. The Partnership intends to draw down from the Partnerships revolving
credit facility or use cash on hand to pay the purchase price for Preferred Units tendered and accepted for payment. See Section 5 of this Offer to Purchase.
Is my sale of Preferred Units in the Offer a taxable transaction for U.S. federal income tax purposes?
In general, a Preferred Unitholder who sells all or some of its Preferred Units pursuant to the Offer will be treated as receiving a cash
distribution from the Partnership. Such Preferred Unitholder generally will not recognize income or gain for U.S. federal income tax purposes as a result of the Offer, except to the extent (if any) the amount of cash received by such Preferred
Unitholder exceeds the Preferred Unitholders then-adjusted tax basis in the Preferred Unitholders entire investment in the Partnership at the time of the Offer. See Section 7 of this Offer to Purchase for a more detailed discussion
of certain U.S. federal income tax consequences.
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Is the Partnership required to complete the Offer and purchase all Preferred Units tendered?
There are certain circumstances in which the Partnership will not be required to purchase any Preferred Units tendered as described in
Section 12 of this Offer to Purchase.
Is there any reason Preferred Units tendered will not be accepted?
In addition to those circumstances described in Section 12 of this Offer to Purchase in which the Partnership is not required to purchase
any Preferred Units, the Partnership has reserved the right to reject any and all Preferred Units tendered determined by it not to be in appropriate form or the acceptance for payment of which may, in the opinion of the Partnerships counsel,
be unlawful.
If Preferred Units I tender are accepted by the Partnership, how and when will payment be made?
If accepted for payment, the Partnership will pay for all validly tendered and not withdrawn Preferred Units promptly after the Termination
Date. The Partnership will pay for your validly tendered and not withdrawn Preferred Units in U.S. dollars by depositing the purchase price with the Depositary, which will act as your agent for the purpose of receiving payments from us and
transmitting such payments to you. In all cases, payment for tendered Preferred Units will be made only after timely receipt by the Depositary of the Letter of Transmittal and any other required documents as described in Section 3 of this Offer
to Purchase.
What action need I take if I decide not to tender my Preferred Units?
None.
How do I obtain additional
information?
Requests for additional copies of the Offer to Purchase, the Letter of Transmittal and questions about how to tender your
Preferred Units should be directed to the Depositary as follows:
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Telephone: |
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(718) 921-8317 or (877) 248-6417 |
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U.S. Mail: |
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American Stock Transfer & Trust Company, LLC |
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Operations Center |
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Attn: Reorganization Department |
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6201 15th Avenue |
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Brooklyn, New York 11219 |
10
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements and information in this Offer to Purchase may constitute forward-looking statements. The words
believe, expect, anticipate, plan, intend, foresee, should, would, could, or other similar expressions are intended to identify
forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on the Partnerships current expectations and beliefs concerning future developments and their potential effect on it. While
management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting the Partnership will be those that they anticipate. All comments concerning the
Partnerships expectations for future revenues and operating results are based on the Partnerships forecasts for its existing operations and do not include the potential impact of any future acquisitions. The Partnerships
forward-looking statements involve significant risks and uncertainties (some of which are beyond the Partnerships control) and assumptions that could cause actual results to differ materially from the Partnerships historical experience
and its present expectations or projections. 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:
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the Partnerships ability to execute its business strategies; |
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the volatility of realized oil and natural gas prices; |
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the level of production on the Partnerships properties; |
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regional supply and demand factors, delays, or interruptions of production; |
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the Partnerships ability to replace its oil and natural gas reserves; |
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the Partnerships ability to identify, complete, and integrate acquisitions; |
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general economic, business, or industry conditions; |
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competition in the oil and natural gas industry; |
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the ability of the Partnerships operators to obtain capital or financing needed for development and exploration operations; |
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title defects in the properties in which the Partnership invests; |
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the availability or cost of rigs, equipment, raw materials, supplies, oilfield services, or personnel; |
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restrictions on the use of water; |
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the availability of transportation facilities; |
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the ability of the Partnerships operators to comply with applicable governmental laws and regulations and to obtain permits and governmental approvals; |
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federal and state legislative and regulatory initiatives relating to hydraulic fracturing; |
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future operating results; |
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future cash flows and liquidity, including the Partnerships ability to generate sufficient cash to pay quarterly distributions; |
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exploration and development drilling prospects, inventories, projects, and programs; |
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operating hazards faced by the Partnerships operators; |
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the ability of the Partnerships operators to keep pace with technological advancements; and |
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certain factors discussed elsewhere in this Offer to Purchase. |
For additional information
regarding known material factors that could cause the Partnerships actual results to differ from its projected results, please see Risk Factors in the Partnerships final prospectus dated April 30,
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2015 and filed with the Securities and Exchange Commission, pursuant to Rule 424(b) under the Securities Act of 1933, on May 1, 2015 and, to the extent applicable, the Partnerships
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Readers are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date hereof. The Partnership undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or
otherwise.
12
INTRODUCTION
To the preferred unitholders of Black Stone Minerals, L.P.:
Black Stone Minerals, L.P., a Delaware limited partnership (the Partnership), hereby offers to purchase for cash up to 100% of its
Series A Preferred Units, par value $1,000.00 per unit (the Preferred Units), at 100% of their par value of $1,000.00 per unit, plus any unpaid yield accrued through 5:00 p.m., New York City time, on December 10, 2015, or such later
date to which the offer may be extended (the Termination Date), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal, which is included herewith (the Letter of
Transmittal and, together with this Offer to Purchase, the Offer). The depositary for the Offer is American Stock Transfer and Trust Company, LLC (the Depositary). The Partnership has provided materials for the Offer to
record holders on or about November 5, 2015.
THIS OFFER IS BEING EXTENDED TO ALL HOLDERS OF PREFERRED UNITS (PREFERRED
UNITHOLDERS) OF THE PARTNERSHIP AND IS SUBJECT TO CERTAIN CONDITIONS OUTLINED IN THIS OFFER TO PURCHASE AND IN THE LETTER OF TRANSMITTAL. SEE SECTION 12 OF THIS OFFER TO PURCHASE.
NONE OF THE PARTNERSHIP, BLACK STONE MINERALS GP, L.L.C. (THE GENERAL PARTNER), OR THE BOARD OF DIRECTORS OF THE GENERAL PARTNER
MAKES ANY RECOMMENDATION AS TO WHETHER OR NOT TO TENDER UNITS IN THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN AND IN THE LETTER OF
TRANSMITTAL, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE PARTNERSHIP, THE GENERAL PARTNER, OR THE GENERAL PARTNERS BOARD OF DIRECTORS. AS OF THE DATE OF THIS OFFER, THE
PARTNERSHIP HAS BEEN ADVISED THAT OF THE 32,395 PREFERRED UNITS BENEFICIALLY OWNED BY DIRECTORS OR EXECUTIVE OFFICERS OF THE GENERAL PARTNER, APPROXIMATELY 8,363 WILL BE TENDERED PURSUANT TO THE OFFER. THESE 8,363 UNITS REPRESENT 25.8% OF THE
PREFERRED UNITS BENEFICIALLY OWNED BY THE GENERAL PARTNERS DIRECTORS AND EXECUTIVE OFFICERS AND 7.1% OF THE OUTSTANDING PREFERRED UNITS. HOWEVER, THESE DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER ARE NOT OBLIGATED TO TENDER THEIR
PREFERRED UNITS IN THE OFFER AND MAY SUBSEQUENTLY ELECT NOT TO TENDER SOME OR ALL OF SUCH PREFERRED UNITS IN THE OFFER. FURTHERMORE, DIRECTORS OR EXECUTIVE OFFICERS THAT PREVIOUSLY ADVISED THE PARTNERSHIP OF THEIR INTENTION NOT TO TENDER MAY
SUBSEQUENTLY ELECT TO TENDER SOME OR ALL OF THEIR PREFERRED UNITS IN THE OFFER.
THIS OFFER HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE FAIRNESS OR MERITS OF SUCH OFFER OR ON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
As of the date of this Offer to Purchase, there were 117,963 Preferred Units issued and
outstanding.
No fees or commission will be payable to the Partnership in connection with the Offer.
The number of Preferred Units outstanding after the completion of the Offer will depend on the number of Preferred Units tendered and
purchased in the Offer. Any Preferred Units acquired by the Partnership pursuant to the Offer will be retired and cancelled and will no longer be considered issued or outstanding. Any Preferred Units not tendered pursuant to the Offer will remain
issued and outstanding until converted or redeemed.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION,
AND YOU SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY BEFORE YOU MAKE A DECISION WITH RESPECT TO THE OFFER.
13
THE TENDER OFFER
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Terms of the Offer; Extension of the Offer; Amendment |
Upon the terms and subject to the
conditions set forth in the Offer, the Partnership will accept for payment, and pay for, up to 100% of the outstanding Preferred Units validly tendered on or prior to the Termination Date and not withdrawn as permitted by Section 4 of this
Offer to Purchase.
The price to be paid for the Preferred Units is an amount per unit, net to the seller in cash, without interest and
less any applicable withholding taxes, equal to 100% of the par value of $1,000.00 per Preferred Unit, plus any unpaid yield accrued through the Termination Date. Under no circumstances will interest be paid on the purchase price for tendered
Preferred Units, regardless of any extension of or amendment to the Offer or any delay in paying for such Preferred Units.
The
Partnership expressly reserves the right, in its sole and absolute discretion, at any time or from time to time, to extend the period of time during which the Offer is open by making a public announcement therefor. Any such announcement will be made
no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Termination Date. During the extension, all Preferred Units previously tendered and not withdrawn will remain subject to the Offer, subject to the
right of a tendering Preferred Unitholder to withdraw his Preferred Units.
The Partnership also reserves the right, at any time and from
time to time up to and including the Termination Date, to (a) upon the occurrence or non-occurrence, as applicable, of any of the conditions specified in Section 12 of this Offer to Purchase, the Partnership may (i) terminate the
Offer and not purchase or pay for any Preferred Units or, (ii) subject to applicable law, postpone payment for Preferred Units; and (b) amend the Offer in any respect by making a public announcement thereof. Without limiting the manner in
which the Partnership may choose to make a public announcement of extension, termination, or amendment, except as provided by applicable law, the Partnership shall have no obligation to publish, advertise, or otherwise communicate any such public
announcement.
If the Partnership materially changes the terms of the Offer or the information concerning the Offer, or if it waives a
material condition of the Offer, the Partnership will extend the Offer to the extent required by rules promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). These rules require that the minimum period
during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer (other than a change in price or a change in percentage of securities sought) will depend on the facts and
circumstances, including the relative materiality of such terms or information. If (i) the Partnership increases or decreases the price to be paid for Preferred Units or the Partnership decreases the number of Preferred Units being sought and
(ii) the Offer is scheduled to terminate at any time earlier than the termination of a period ending on the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent, or given, the Offer
will be extended at least until the termination of such period of ten business days.
The Partnerships offer is being made to all
Preferred Unitholders. The Offer is subject to certain conditions as set forth in the Offer. See Section 12 of this Offer to Purchase for additional information about the conditions of this Offer.
Subject to the terms and conditions of the Offer, the Partnership will pay the consideration offered or return the tendered securities
promptly after the termination or withdrawal, respectively, of the Offer in accordance with the terms as set forth in Section 2 below.
|
2. |
Acceptance for Payment and Payment for Preferred Units |
Upon the terms and subject to
the conditions of the Offer, the Partnership will accept for payment, and will pay cash for, Preferred Units validly tendered on or before the Termination Date, and not properly withdrawn in
14
accordance with Section 4 below, promptly after the Termination Date in accordance with the procedures set forth below. In all cases, payment for Preferred Units tendered and accepted for
payment pursuant to the Offer will be made only after timely receipt by the Depositary of the Letter of Transmittal and any other required documents as described in Section 3 of this Offer to Purchase. The Partnership expressly reserves the
right, in its sole and absolute discretion, to delay the acceptance for payment of, or payment for, Preferred Units, in order to comply, in whole or in part, with any applicable law.
For purposes of the Offer, the Partnership will be deemed to have accepted for payment Preferred Units validly tendered and not properly
withdrawn in accordance with Section 4, if and when it gives or causes to be given oral or written notice to the Depositary of its acceptance for payment of such Preferred Units pursuant to the Offer. Payment for Preferred Units accepted for
payment pursuant to the Offer will be made by deposit of the aggregate purchase price therefor, without interest and less any applicable withholding taxes, with the Depositary, which will act as agent for the tendering Preferred Unitholders for
purposes of receiving payments from the Partnership and transmitting such payments to the tendering Preferred Unitholders. Under no circumstances will interest be paid on the purchase price for Preferred Units, regardless of any delay in making such
payment. If the Partnership increases the consideration to be paid for Preferred Units pursuant to this Offer, the Partnership will pay such increased consideration for all Preferred Units purchased pursuant to this Offer.
If any tendered Preferred Units are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, or are not
accepted because of an invalid tender, such unpurchased Preferred Units will be returned via credit to your account maintained at American Stock Transfer and Trust Company, LLC, as the transfer agent for the Preferred Units, without expense to you,
as promptly as practicable following the termination of the Offer.
The purchase price of the Preferred Units is an amount per Preferred
Unit, net to the seller in cash, without interest and less any applicable withholding taxes, equal to 100% of the par value of $1,000.00 per Preferred Unit, plus any unpaid yield accrued through the Termination Date.
|
3. |
Procedure for Tendering Preferred Units; Backup Withholding |
For a Preferred Unitholder
to validly tender Preferred Units pursuant to the Offer, a properly completed and duly executed Letter of Transmittal, together with any required signature guarantees, and any other documents required by the Letter of Transmittal, must be
transmitted to and received by the Depositary at one of its addresses set forth on the last page of this Offer to Purchase. All signatures on the Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks,
savings and loan associations, and brokerage houses) that is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the Security Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Program and the Stock Exchanges Medallion Program (each, an Eligible Institution) unless the Letter of Transmittal is signed by the registered holder of the Preferred Units tendered and such registered
owner has not completed the box titled Special Payment Instructions or the box titled Special Delivery Instructions on the Letter of Transmittal. In all other cases, all signatures on the Letter of Transmittal must be
guaranteed by an Eligible Institution. See Instruction 4 of the Letter of Transmittal for further information. Payment for Preferred Units tendered and accepted for payment pursuant to the Offer will be made, in all cases, only after timely receipt
of (i) a properly completed and duly executed Letter of Transmittal (or facsimile thereof) for such Preferred Units and (ii) any other documents required by the Letter of Transmittal. The tender of Preferred Units pursuant to any of the
procedures described in this Section 3 will constitute an agreement between the tendering Preferred Unitholder and the Partnership upon the terms and subject to the conditions of the Offer.
The method of delivery of all required documents is at the election and risk of each tendering Preferred Unitholder. If delivery is by
mail, registered mail with return receipt requested, properly insured, is recommended.
15
All questions as to the validity, form, eligibility (including time of receipt), payment, and
acceptance for payment of any tender of Preferred Units will be determined by the Partnership in its sole and absolute discretion, which determination shall be final and binding. The Partnership reserves the absolute right to reject any and all
tenders of Preferred Units it determines not to be in proper form or the acceptance for payment of which may, in the opinion of its counsel, be unlawful. The Partnership also reserves the absolute right to waive any of the conditions of the Offer or
any defect or irregularity in the tender of any Preferred Units. No tender of Preferred Units will be deemed to have been validly made until all defects and irregularities have been cured or waived. The Partnership and the Depositary shall make
reasonable efforts to notify any person of any defect in any Letter of Transmittal submitted to the Depositary. The Partnerships interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and instructions
thereto) will be final and binding.
Backup Withholding
Backup withholding tax will be imposed on the gross proceeds paid to a tendering U.S. Preferred Unitholder (as defined in Section 7)
unless the U.S. Preferred Unitholder provides such U.S. Preferred Unitholders taxpayer identification number (TIN), which is generally a social security number or federal employer identification number, and certain other
information (generally on IRS Form W-9, which is being provided with each Letter of Transmittal), or otherwise establish a basis for exemption from backup withholding. Exempt U.S. Preferred Unitholders (including, among others, corporations) are not
subject to these backup withholding requirements, but may be required to provide documentation to establish their exempt status. If a tendering U.S. Preferred Unitholder does not provide the correct TIN or establish another adequate basis for
exemption, such U.S. Preferred Unitholder may be subject to backup withholding at a rate of 28% imposed on the amount received by such U.S. Preferred Unitholder pursuant to this Offer.
Any amounts received by a tendering Non-U.S. Preferred Unitholder (as defined in Section 7) pursuant to this Offer may be subject to
backup withholding unless such Non-U.S. Preferred Unitholder submits an appropriate, properly completed IRS Form W-8 certifying, under penalties of perjury, to such Non-U.S. Preferred Unitholders foreign status in order to establish an
exemption from backup withholding.
Backup withholding is not an additional U.S. federal income tax. Rather, a Preferred Unitholders
U.S. federal income tax liability, if any, will be offset by the amount withheld. If backup withholding, results in an overpayment of U.S. federal income tax, a refund or credit may be obtained from the IRS, provided the required information is
timely furnished to the IRS.
To prevent backup withholding, each U.S. Preferred Unitholder who does not otherwise establish an
exemption from such withholding must provide the Depositary with the U.S. Preferred Unitholders correct taxpayer identification number and provide certain other information by completing the IRS Form W-9 included in the Letter of Transmittal.
For a discussion of certain federal income tax consequences to tendering U.S. Preferred Unitholders, see Section 7 of this Offer
to Purchase.
Tenders of Preferred Units made pursuant to the Offer may be
withdrawn at any time prior to the Termination Date. After the Termination Date, Preferred Units may not be withdrawn except as otherwise provided in this section.
To be effective, a written notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the last page
of this Offer to Purchase. Any notice of withdrawal must specify the name of the person who tendered such Preferred Units to be withdrawn, the number of shares of Preferred Units to be withdrawn and the names in which the Preferred Units to be
withdrawn are registered. Any notice of withdrawal must also specify the name and number of the account at American Stock Transfer and Trust Company, LLC, as the transfer agent for the Preferred Units, to be credited with the withdrawn Preferred
Units.
16
All questions as to the form and validity, including time of receipt, of any notice of withdrawal
will be determined by the Partnership, in its sole and absolute discretion, which determination shall be final and binding. The Partnership and the Depositary shall make reasonable efforts to notify any person of any defect in any notice of
withdrawal submitted to the Depositary.
Withdrawals may not be rescinded and any Preferred Units properly withdrawn will be deemed not to
have been validly tendered for purposes of the Offer. However, withdrawn Preferred Units may be re-tendered by following the procedures described in Section 3 of this Offer to Purchase at any time prior to the Termination Date.
|
5. |
Source and Amount of Funds |
If 100% of the outstanding Preferred Units are purchased
pursuant to the Offer, the estimated cost to the Partnership, not including fees and expenses incurred in connection with the Offer, will be approximately $117,963,000, plus any unpaid yield accrued through the Termination Date.
The Partnership intends to draw down from the Partnerships credit facility or use cash on hand to pay the purchase price for Preferred
Units accepted for payment. The Partnership has no alternative financing arrangements or plans relating to the Offer other than those described herein.
The Partnerships amended credit agreement (the Senior Line of Credit) has a maximum credit amount of $1.0 billion. All
unpaid principal and interest for the Senior Line of Credit is due February 4, 2019. The borrowing base was $700.0 million at December 31, 2014. The Partnerships semi-annual borrowing base redetermination process resulted in a
decrease of the borrowing base to $550.0 million, effective October 28, 2015. The amount of the borrowing base is derived from the value of the Partnerships oil and natural gas properties determined by the lender syndicate using pricing
assumptions that often differ from strip prices.
On January 23, 2015, the Senior Line of Credit was amended and restated. Borrowings
under the Senior Line of Credit bear interest at LIBOR plus a margin between 1.50% and 2.50%, or prime rate plus a margin between 0.50% and 1.50%, with the margin depending on the borrowing base utilization percentage of the loan. The prime rate is
determined to be the higher of the financial institutions prime rate or the federal funds effective rate plus 0.50% per annum. Accrued interest is payable at the end of each calendar quarter or at the end of each interest period, unless
the interest period is longer than 90 days in which case interest is payable at the end of every 90-day period. In addition, a commitment fee is payable at the end of each calendar quarter based on either a rate of 0.375% if the borrowing base
utilization percentage is less than 50%, or 0.50% per annum if the borrowing base utilization percentage is equal to or greater than 50%. The Senior Line of Credit is secured by a majority of the Partnerships oil and natural gas
production and assets.
The Senior Line of Credit contains various limitations on future borrowings, leases, hedging, and sales of assets.
Additionally, the Senior Line of Credit requires the Partnership to maintain a current ratio of not less than 1.0:1.0 and a ratio of total debt to EBITDAX (Earnings before Interest, Taxes, Depreciation, Amortization, and Exploration) of not more
than 3.5:1.0. The Partnership intends to repay the Senior Line of Credit over time with cash from operations or with proceeds from issuances of equity or debt.
It is expected that the draw down from the Partnerships credit facility or cash on hand would provide the financing to purchase any
tendered Preferred Units. The cost of leverage to the Partnership resulting from the use of the credit facility is expected to be less than the cost of leverage associated with the Preferred Units.
The foregoing summary of certain material terms of the Senior Line of Credit is qualified in its entirety by the terms of the Senior Line of
Credit, which is filed as an exhibit to the Partnerships Registration Statement on Form S-1 filed on March 19, 2015, and the First Amendment to the Senior Line of Credit, which is filed as an exhibit to the Partnerships Current
Report on Form 8-K filed on October 29, 2015, both of which are incorporated herein by reference.
17
Purchasing the Preferred Units will be immediately accretive to
the Partnerships common and subordinated unitholders.
The Preferred Units currently yield 10% per year and, without any
action by the holders of Preferred Units, will convert into common and subordinated units of the Partnership over the next three years. The issuance of these additional common and subordinated units would increase the total number of units entitled
to any distributions paid by the Partnership. If you assume:
|
|
|
the Partnership were to pay the full Minimum Quarterly Distribution (as defined in the Partnership Agreement) on all common and subordinated units during the subordination period, including those issued upon mandatory
conversion of the Preferred Units; |
|
|
|
the holders of the Preferred Units did not exercise their options to convert or redeem the Preferred Units; |
|
|
|
the Partnership timely pays the yield on the Preferred Units; and |
|
|
|
the yield on the Preferred Units does not exceed 10% as a result of participation in distributions or default by the Partnership; |
then the currently outstanding Preferred Units would receive an aggregate of approximately $40.9 million in preferred yield and common and subordinated unit
distributions during the period between October 1, 2015 and March 31, 2019. The distributions would be generally payable as follows (in thousands):
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4Q 2015 |
|
|
2016 |
|
|
2017 |
|
|
2018 |
|
|
1Q 2019 |
|
Preferred Unit Distributions |
|
$ |
2,973 |
|
|
$ |
8,861 |
|
|
$ |
4,918 |
|
|
$ |
991 |
|
|
$ |
|
|
Common Unit Distributions |
|
|
|
|
|
|
1,312 |
|
|
|
2,863 |
|
|
|
4,653 |
|
|
|
1,208 |
|
Subordinated Unit Distributions |
|
|
|
|
|
|
1,719 |
|
|
|
3,751 |
|
|
|
6,095 |
|
|
|
1,582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Distributions |
|
$ |
2,973 |
|
|
$ |
11,892 |
|
|
$ |
11,532 |
|
|
$ |
11,739 |
|
|
$ |
2,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Because the Partnership will fund the purchase of the Preferred Units tendered in response to this Offer with borrowings under
its revolving credit facility or with cash on hand, the Partnership expects that the purchase will be approximately 8% accretive to its common and subordinated unitholders.
Purchasing the Preferred Units will provide liquidity to holders who tender their Preferred Units.
The Preferred Units are subject to transfer restrictions under the Partnership Agreement, are not listed on any securities exchange, and are
not actively traded in any other established market. Consequently, the liquidity of the Preferred Units is extremely limited.
As the
Preferred Units convert into common and subordinated units over time, the Preferred Unitholders liquidity position should improve, because the Partnerships common units are publicly listed on the New York Stock Exchange
(NYSE), where they are traded under the ticker BSM, and the Partnership expects that they will continue to be listed for the foreseeable future. But the subordinated unitsinto which the Preferred Units are partially
convertibleare, like the Preferred Units, subject to transfer restrictions, not listed on any securities exchange, and not actively traded in any other established market. The subordinated units will only become liquid if the subordination
period expires, causing the subordinated units to convert into common units.
Holders of the Preferred Units may also improve their
liquidity position by exercising an annual option to redeem a portion of their Preferred Units, but the amount that may be redeemed each year is limited by the Partnership Agreement.
None of the Partnership, the General Partner, or the General Partners Board of Directors has made any recommendation to any Preferred
Unitholder about whether to tender or refrain from tendering the Preferred
18
Units. Preferred Unitholders are urged to evaluate carefully all information in the tender offer documents, consult their own investment and tax advisers, and make their own decisions whether to
tender or refrain from tendering their Preferred Units.
|
7. |
Certain U.S. Federal Income Tax Consequences of the Offer |
The following discussion
describes certain U.S. federal income tax consequences of the Offer that may be relevant to U.S. Preferred Unitholders (as defined below) who tender some or all of their Preferred Units for cash pursuant to the Offer. Except where noted, this
summary deals only with Preferred Units held for investment purposes (commonly referred to as capital assets) and does not purport to discuss all aspects of U.S. federal income taxation which may be important to a particular investor in
light of its investments or tax circumstances, or to certain types of investors subject to special tax rules, such as those of dealers in securities or commodities, traders in securities that elect to mark their holdings to market, financial
institutions, tax-exempt organizations, insurance companies, U.S. expatriates, persons liable for the alternative minimum tax, persons holding Preferred Units as a part of a hedging, conversion, or constructive sale transaction or a straddle, U.S.
Preferred Unitholders whose functional currency is not the U.S. dollar or Non-U.S. Preferred Unitholders (as defined below). Furthermore, the discussion below is based upon the provisions of the Internal Revenue Code of 1986, as amended (the
Code), and regulations, rulings, judicial decisions, and other applicable authorities thereunder as of the date hereof. All of the foregoing is subject to repeal, revocation, modification, or differing interpretations, possibly with
retroactive effect, so as to result in U.S. federal income tax consequences different from those discussed below. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to those described
herein. No advance ruling has been or will be sought from the IRS regarding any matter discussed herein. Further, no opinion of counsel has been or will be obtained with regard to the Offer.
The U.S. federal income tax treatment of a Preferred Unitholder participating in the Offer depends in some instances on determinations of
fact and interpretations of complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available. Accordingly, Preferred Unitholders should consult their own tax advisers regarding the U.S. federal, state,
local and foreign tax consequences of participating in the Offer or not participating in the Offer in light of their particular situations.
If a partnership holds Preferred Units, the tax treatment of a partner in such partnership will generally depend upon the status of the
partner and the activities of the partnership. If you are a partner of a partnership holding Preferred Units, you should consult your tax advisers.
As used herein, a U.S. Preferred Unitholder means a Preferred Unitholder that is (i) a citizen or individual resident of the
U.S., (ii) a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S. or any state thereof or the District of Columbia, (iii) an estate the income
of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if it (x) is subject to the primary supervision of a court within the U.S. and one or more U.S. persons have the authority to control all
substantial decisions of the trust or (y) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. A Non-U.S. Preferred Unitholder is a Preferred Unitholder that is neither a U.S.
Preferred Unitholder nor a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes).
Tax
Consequences to U.S. Preferred Unitholders
A U.S. Preferred Unitholder who sells all or some of its Preferred Units pursuant to the
Offer will be treated as receiving a cash distribution from the Partnership. An exchange of Preferred Units for cash pursuant to the Offer generally will not be a taxable transaction for U.S. federal income tax purposes, except to the extent (if
any) the amount of cash received by a U.S. Preferred Unitholder exceeds the U.S. Preferred Unitholders then-adjusted tax basis in the U.S. Preferred Unitholders entire investment in the Partnership at the time of the Offer.
If a U.S. Preferred Unitholder (i) sells all of its Preferred Units and continues to own common or subordinated units in the Partnership
or (ii) sells only a portion of its Preferred Shares, such U.S. Preferred
19
Unitholder will be treated as receiving a cash distribution by the Partnership pursuant to the Offer in respect of less than all of the U.S. Preferred Unitholders Preferred Units and common
and subordinated units in the Partnership (collectively, Partnership Units). A cash distribution by the Partnership to a U.S. Preferred Unitholder pursuant to the Offer in respect of less than all of such U.S. Preferred Unitholders
Partnership Units will reduce, but not below zero, such U.S. Preferred Unitholders then-adjusted tax basis in its Partnership Units held immediately before the Offer by the amount of cash received in the Offer and any reduction in such U.S.
Preferred Unitholders allocable share of the Partnerships nonrecourse borrowings (as defined for U.S. federal income tax purposes), if any (see Adjusted Tax Basis below). If such cash distribution in respect of the Preferred
Units by the Partnership to the U.S. Preferred Unitholder (along with any reduction in such U.S. Preferred Unitholders allocable share of the Partnerships nonrecourse borrowings (as defined for U.S. federal income tax purposes), if any)
exceeds the U.S. Preferred Unitholders adjusted tax basis in its Partnership Units, the excess will be taxable to the U.S. Preferred Unitholder as though it were a gain from a sale or exchange of the Preferred Units. Such recognized gain will
generally be treated as capital gain, and will be short-term or long-term depending upon the U.S. Preferred Unitholders holding period for its Preferred Units at the time the gain is recognized. U.S. Treasury Regulations provide that a U.S.
Preferred Unitholder may have a fragmented holding period for its Preferred Units if the U.S. Preferred Unitholder has made contributions to the Partnership at different times. Amounts realized attributable to the U.S. Preferred Unitholders
allocable share of the Partnerships unrealized receivables or substantially appreciated inventory, each as defined in section 751 of the Code, may be treated as ordinary income, taxable at ordinary income rates. It is
possible that partial redemptions made during the taxable year could result in taxable gain to a U.S. Preferred Unitholder where no gain would otherwise have resulted if the same partial redemption were made at the end of the taxable year.
If a U.S. Preferred Unitholder sells all of its Preferred Units and owns no common or subordinated units in the Partnership, such U.S.
Preferred Unitholder will be treated as redeeming for cash all of its Partnership Units. A U.S. Preferred Unitholder who redeems for cash all of its Partnership Units will recognize gain or loss measured by the difference between the amount realized
on the cash distribution and the U.S. Preferred Unitholders then-adjusted tax basis in the U.S. Preferred Unitholders Partnership Units held immediately before the Offer (see Adjusted Tax Basis below). Such recognized gain or
loss will generally be treated as capital gain or loss, and will be short-term or long-term depending upon the U.S. Preferred Unitholders holding period for its Preferred Units at the time the gain is recognized. U.S. Treasury Regulations
provide that a U.S. Preferred Unitholder may have a fragmented holding period for its Preferred Units if the U.S. Preferred Unitholder has made contributions to the Partnership at different times. The amount realized will include the U.S. Preferred
Unitholders allocable share of the Partnerships nonrecourse borrowings (as defined for U.S. federal income tax purposes), if any. Amounts realized attributable to the U.S. Preferred Unitholders allocable share of the
Partnerships unrealized receivables or substantially appreciated inventory, each as defined in section 751 of the Code, may be treated as ordinary income, taxable at ordinary income rates.
No loss will be recognized by a U.S. Preferred Unitholder on such exchange of Preferred Units for cash pursuant to the Offer, except that a
U.S. Preferred Unitholder that has its entire investment in the Partnership purchased by the Partnership may recognize a loss, but only to the extent that the amount of cash consideration (including any reduction in such U.S. Preferred
Unitholders allocable share of the Partnerships nonrecourse borrowings (as defined for U.S. federal income tax purposes), if any) received from the Partnership is less than the U.S. Preferred Unitholders then-adjusted tax basis in
such U.S. Preferred Unitholders Partnership Units.
Tax Consequences to Non-U.S. Preferred Unitholders. In general, the
U.S. federal income taxation of a Non-U.S. Preferred Unitholder with respect to an exchange of Preferred Units for cash pursuant to the Offer will depend on the characterization of the transaction, determined in the same manner as discussed above
for U.S. Preferred Unitholders. Distributions to a Non-U.S. Preferred Unitholder will be subject to withholding taxes imposed at the highest effective tax rate applicable to such Non-U.S. Preferred Unitholder, and the Non-U.S. Preferred Unitholder
will be required to file United States federal tax return. Non-U.S. Preferred Unitholders should consult their own tax advisers.
20
Adjusted Tax Basis. Generally, a partner is treated as having a single tax basis in its
partnership interest, even if it holds different classes of interests. Thus, if a U.S. Preferred Unitholder also holds common and/or subordinated units in the Partnership, such U.S. Preferred Unitholder is treated as having a single tax basis in its
Partnership Units. A U.S. Preferred Unitholders adjusted tax basis in its Partnership Units is equal to the U.S. Preferred Unitholders aggregate capital contributions to the Partnership as adjusted by certain items. Tax basis is
generally increased by the U.S. Preferred Unitholders allocable share of Partnership profits (and items of income and gain) and Partnership nonrecourse borrowings (as defined for U.S. federal income tax purposes), if any, prior to the purchase
of such Preferred Units. Tax basis is generally decreased by the U.S. Preferred Unitholders allocable share of Partnership losses (and items of loss, deduction, and expense), the amount of cash distributed by the Partnership to the U.S.
Preferred Unitholder, and the Partnerships tax basis of property (other than cash) distributed by the Partnership to the U.S. Preferred Unitholder and any reduction in the U.S. Preferred Unitholders allocable share of Partnership
nonrecourse borrowings (as defined for U.S. federal income tax purposes), if any, prior to the purchase of such Preferred Units.
Gain
or loss, if any, recognized by a Preferred Unitholder on such exchange of Preferred Units for cash pursuant to the Offer is dependent on such Preferred Unitholders adjusted tax basis in its entire investment in the Partnership at the time of
the Offer. Accordingly, each Preferred Unitholder should consult its own tax adviser regarding its adjusted tax basis in its entire investment in the Partnership at the time of the Offer.
Backup Withholding. See Section 3 with respect to the application of backup withholding on payments made to Preferred
Unitholders.
State and Local Withholding. If a Preferred Unitholder tenders any Preferred Units pursuant to this Offer, the
Partnership may be required under state or local tax laws to deduct and withhold a portion of the cash consideration. Preferred Unitholders should consult their own tax adviser concerning whether any state or local withholding would be required on a
disposition of Preferred Units and whether such amounts may be available as a credit on their state or local tax return.
The tax
discussion set forth above is included for general information only. Preferred Unitholders are urged to consult their own tax adviser to determine the particular tax consequences to him or her of the Offer, including the applicability and effect of
state, local and foreign tax laws.
|
8. |
Distributions on the Preferred Units |
While any of the Preferred Units remain
outstanding, cash or other property of the Partnership will be distributed 100% to the Preferred Unitholders until the aggregate Unpaid Series A Preferred Yield (as defined in the Partnership Agreement) of each Preferred Unit accrued through the
last day of the immediately preceding calendar quarter has been reduced to zero. In addition, the Preferred Units are entitled to participate (on an as-converted basis) with the common and subordinated units when the aggregate distributions on the
common and subordinated units in a calendar year exceed 10% of the aggregate fair market value of the common and subordinated units as of the beginning of such year. The following table presents the distributions per Preferred Unit and aggregate
preferred distributions for the periods presented:
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|
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Three Months Ended |
|
|
|
September 30, 2015 |
|
|
June 30, 2015 |
|
|
March 31, 2015 |
|
|
December 31, 2014 |
|
|
September 30, 2014 |
|
|
June 30, 2014 |
|
|
March 31, 2014 |
|
|
December 31, 2013 |
|
Distributions per Preferred Unit |
|
$ |
25.21 |
|
|
$ |
24.93 |
|
|
$ |
24.66 |
|
|
$ |
25.21 |
|
|
$ |
25.21 |
|
|
$ |
24.93 |
|
|
$ |
24.66 |
|
|
$ |
25.21 |
|
Aggregate Preferred Distributions |
|
$ |
2,973,314 |
|
|
$ |
2,940,995 |
|
|
$ |
2,909,096 |
|
|
$ |
3,692,377 |
|
|
$ |
3,962,377 |
|
|
$ |
3,919,307 |
|
|
$ |
3,881,688 |
|
|
$ |
3,967,947 |
|
21
|
9. |
Certain Information Concerning the Partnership |
The Partnership is a limited partnership
formed under the laws of the State of Delaware. The principal executive offices of the Partnership are located at 1001 Fannin Street, Suite 2020, Houston, Texas 77002. The Partnerships business telephone number is (713) 445-3200.
The Partnership is subject to the information and reporting requirements of the Exchange Act and in accordance therewith is obligated to file
reports and other information with the Securities and Exchange Commission (the SEC) relating to its business, financial condition, and other matters. The Partnership has also filed the Offer to Purchase on Schedule TO with the SEC. Such
reports and other information should be available for inspection at the public reference room at the SECs office, 100 F Street, N.E., Washington, DC 20549, and copies of these materials may be obtained from that office after payment of fees
prescribed by the SEC. The Partnerships filings are also available to the public free of charge on the SECs internet site (http://www.sec.gov). The filings are also available on the Partnerships website
(http://www.blackstoneminerals.com).
10. Interests of Directors and Executive
Officers; Transactions and Arrangements Concerning the Preferred Units
The following table presents information reflected in the
Partnerships records regarding beneficial ownership of the Partnerships common units, subordinated units, and Preferred Units as of November 2, 2015, unless otherwise noted, by (i) the General Partner; (ii) each of the
General Partners directors and named executive officers; (iii) each unitholder known by us to beneficially hold 5% or more of the Partnerships common units, on an as-converted basis; and (iv) all of the General Partners
directors and executive officers as a group. Unless otherwise noted, the address of each of them is in care of the Partnership at 1001 Fannin Street, Suite 2020, Houston, Texas 77002.
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Name of Beneficial Owner |
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Number of Common Units Beneficially Owned |
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Percentage of Common Units Beneficially Owned |
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Number of Subordinated Units Beneficially Owned |
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Percentage of Subordinated Units Beneficially Owned |
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Number of Preferred Units Beneficially Owned |
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Percentage of Preferred Units Beneficially Owned |
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Black Stone Minerals G.P., L.L.C. (1). |
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Camden Energy Limited Partnership (2) |
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8,118,065 |
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8.4 |
% |
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10,632,841 |
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11.2 |
% |
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Thomas L. Carter, Jr. (2)(3) |
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8,637,907 |
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9.0 |
% |
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11,275,081 |
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11.9 |
% |
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2,250 |
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1.9 |
% |
Marc Carroll (4) |
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327,251 |
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* |
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211,496 |
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* |
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113 |
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* |
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Holbrook F. Dorn (5) |
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317,181 |
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* |
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193,330 |
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* |
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William G. Bardel |
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118,496 |
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* |
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148,311 |
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* |
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Carin M. Barth |
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5,263 |
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* |
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D. Mark DeWalch (6) |
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80,754 |
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* |
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94,035 |
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* |
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32 |
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* |
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Ricky J. Haeflinger (7) |
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2,994,236 |
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3.1 |
% |
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3,907,028 |
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4.1 |
% |
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Jerry V. Kyle, Jr. (8) |
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321,669 |
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* |
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409,187 |
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* |
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Michael C. Linn |
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33,708 |
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* |
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37,258 |
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* |
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John H. Longmaid (9) |
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1,380,999 |
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1.4 |
% |
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1,801,906 |
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1.9 |
% |
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William N. Mathis (10) |
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1,127,399 |
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1.2 |
% |
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1,469,751 |
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1.5 |
% |
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24,000 |
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20.3 |
% |
Robert E. W. Sinclair (11) |
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1,883,862 |
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2.0 |
% |
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2,132,449 |
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2.2 |
% |
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Alexander D. Stuart (12) |
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3,909,017 |
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4.1 |
% |
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5,095,119 |
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5.4 |
% |
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6,000 |
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5.1 |
% |
Allison K. Thacker (13) |
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2,826,200 |
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2.9 |
% |
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3,072,569 |
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3.2 |
% |
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Directors and executive officers as a group (18 people) |
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24,513,680 |
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25.5 |
% |
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30,012,721 |
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31.6 |
% |
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32,395 |
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27.5 |
% |
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22
(1) |
The General Partner owns 733,670 common units and 960,943 subordinated units; these units are not included in the beneficial ownership table or in total units outstanding because this entity is a wholly owned subsidiary
of the Partnership. |
(2) |
Camden Energy Limited Partnership is a family partnership, of which the General Partners Chairman, Chief Executive Officer, and President, Thomas L. Carter, Jr., serves as the general partner. |
(3) |
Includes all units held by Camden Energy Limited Partnership, described above, over which Mr. Carter has sole voting power. Mr. Carter also has sole voting and investment power over 22,757 common units, 29,808
subordinated units, and 2,250 Preferred Units held by Preference Partners LP, whose general partner he controls. He shares voting control and investment power over an aggregate of 257,974 common units and 337,888 subordinated units owned by a
nonprofit institution on whose board he serves, and he disclaims beneficial ownership of those units. Mr. Carters ownership also includes 112,439 unvested restricted common units and 147,270 unvested restricted subordinated units
previously issued as equity-based compensation. |
(4) |
Includes 216,913 unvested restricted common units and 66,978 unvested restricted subordinated units issued as equity-based compensation. |
(5) |
Includes 212,697 unvested restricted common units and 61,456 unvested restricted subordinated units issued as equity-based compensation. |
(6) |
Mr. DeWalch has shared voting and investment power over 14,592 common units, 19,114 subordinated units, and 25 Preferred Units held by a trust, of which he serves as co-trustee. |
(7) |
Mr. Haeflinger has shared voting and investment power over an aggregate of 2,988,236 common units and 3,907,028 subordinated units owned by Mayo Clinic and Mayo Clinic Master Retirement Trust. |
(8) |
Mr. Kyle has shared voting and investment power over an aggregate of 259,881 common units and 340,389 subordinated units held by two trusts, of which he serves as co-trustee and beneficiary. He also has shared
voting and investment power over an aggregate of 4,000 common units held by four trusts, of which he serves as co-trustee. |
(9) |
Mr. Longmaid has sole voting and investment power over 1,027,347 common units and 1,338,701 subordinated units held in a trust of which he is the trustee and shares investment and voting power over 353,652 common
units and 463,205 subordinated units held in a trust of which he is a beneficiary. |
(10) |
Mr. Mathis has sole voting and investment power over an aggregate of 909,112 common units, 1,190,736 subordinated units, and 24,000 Preferred Units held by WM Capital Partners, L.P., Conti Street Partners, L.P.,
and Conti Street Minerals, L.P. He has shared voting and investment power of aggregate of 189,117 common units and 247,701 subordinated units held by the estate of a family member, of which he serves as co-executor. |
(11) |
Mr. Sinclair has sole voting and investment power over of an aggregate of 1,854,692 common units and 2,101,135 subordinated units owned by Caddis Minerals, Ltd., Castleton Energy Fund I, Ltd., Leone, Ltd., Shiprock
Minerals, Ltd., and San Miguel River Partners. |
(12) |
Mr. Stuart has sole voting and investment power over an aggregate of 3,528,917 common units, 4,622,092 subordinated units, and 3,000 Preferred Units owned by North Star Oil & Gas, Topsfield Energy, Ltd.,
and RDS Investments, L.P. He also shares voting and investment power over 78,265 common units, 102,510 subordinated units, and 1,500 Preferred Units owned by a trust, of which he serves as co-trustee and which are pledged to a bank as collateral for
a loan to the trust. Mr. Stuart also has shared voting and investment power over 6,687 common units held by a trust, of which he serves as co-trustee. |
(13) |
Ms. Thacker has shared voting and investment power over 2,787,238 common units and 3,061,173 subordinated units held by William Marsh Rice University. Ms. Thacker serves as Chief Investment Officer of an
affiliate of that entity. |
Caddis Minerals Ltd. and Leone Ltd., which are limited partnerships controlled by Robert E.W.
Sinclair, made a pro rata distribution of all 2,423 Preferred Units held by the partnerships to its limited partners effective October 30, 2015. Neither the Partnership nor, to the best of the Partnerships knowledge, any of the directors
or executive officers of the General Partner, any person controlling the Partnership, or any executive officer or director of any person ultimately in control of the Partnership, has effected any other transaction in Preferred Units during the past
60 days.
23
Transactions and Arrangements Concerning the Partnerships Common Units, Subordinated
Units and Preferred Units
Other than as set forth in the Offer, neither the Partnership nor, to the best of the Partnerships
knowledge, any of the directors or named executive officers of the General Partner is a party to any contract, arrangement, understanding, or relationship with any other person relating, directly or indirectly, to the Offer with respect to any
securities of the Partnership, including any contract, arrangement, understanding, or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies, consents, or authorizations.
Severance Agreements. Following the
closing of the Partnerships initial public offering on May 6, 2015, the General Partner caused one of its affiliates to enter into a severance agreement with each of the General Partners executive officers that, among other things,
provides for the payment of cash severance payments and benefits in the event the executive officers employment is terminated under certain circumstances. The description of the severance agreements set forth below is a summary of the material
features of the severance agreements. This summary, however, does not purport to be a complete description of all of the provisions of the severance agreements and is qualified in its entirety by reference to the severance agreements, the forms of
which are filed as exhibits to the Partnerships Registration Statement on Form S-1 filed on April 13, 2015 and are incorporated herein by reference.
The severance agreements provide that if the applicable executive officers employment is terminated without cause or the
executive officer resigns for good reason, then so long as the executive officer executes (and does not revoke within any time provided to do so) a release in a form satisfactory to the executive officers employer within the
applicable time period specified in the severance agreement, the executive officer will receive the following severance payments and benefits: (a) a lump sum cash severance payment equal to the sum of: (i) an amount equal to 1.0 (or, in
the case of Mr. Carter, 2.0) times the sum of the executive officers annualized base salary and target annual bonus as in effect on the date of such termination (or, if such termination occurs within 24 months following a change in
control, an amount equal to 2.0 (or, in the case of Mr. Carter, 3.0) times the sum of the executive officers annualized base salary and target annual bonus as in effect on the date of such termination); (ii) a pro-rated portion
of the executive officers target bonus for the calendar year that includes the date of such termination; and (iii) any earned but unpaid bonus for the calendar year preceding the calendar year that includes the date of such termination;
and (b) cash reimbursement for the amount the executive officer pays for continuation coverage under our affiliates group health plans for up to 12 months following such termination (or, if such termination occurs within 24 months
following a change in control, for up to 24 months following such termination).
Long-Term Incentive Plan. Prior to the closing of
the Partnerships initial public offering on May 6, 2015, the General Partner adopted the Black Stone Minerals, L.P. Long-Term Incentive Plan (the LTIP), pursuant to which non-employee directors of the General Partner and
certain employees and consultants of the General Partner and the Partnerships affiliates are eligible to receive awards with respect to the Partnerships common or subordinated units. The description of the LTIP set forth below is a
summary of certain features of the LTIP. This summary, however, does not purport to be a complete description of all of the provisions of the LTIP and is qualified in its entirety by reference to the LTIP, which is filed as an exhibit to the
Partnerships Current Report on Form 8-K filed on May 6, 2015 and is incorporated herein by reference.
The LTIP provides for
the grant, from time to time, at the discretion of the board of directors of the General Partner or a committee thereof, of unit options, unit appreciation rights, restricted units, phantom units, unit awards, distribution equivalent rights
(DERs), cash awards, and other unit-based awards. Subject to adjustment in the event of certain transactions or changes in capitalization, an aggregate of 15,221,333 units may be delivered pursuant to awards under the LTIP. Units subject
to awards that are forfeited, cancelled, exercised, paid, or otherwise terminated without the delivery of units, and units held back to cover the exercise price or tax withholding applicable to an award, will be available for delivery pursuant to
other awards under the LTIP. Under the LTIP, the maximum aggregate grant date fair value of awards granted to a non-employee director of
24
the General Partner during any calendar year may not exceed $500,000 (or $600,000 in the first year in which an individual becomes a non-employee director). The LTIP is administered by the board
of directors of the General Partner or a committee thereof.
LTIP Awards. In connection with the Partnerships initial public
offering on May 6, 2015, the board of directors of the General Partner granted awards to each of the General Partners executive officers and each of the non-employee directors of the General Partner. The description of these awards set
forth below is a summary of the material features of the awards. This summary, however, does not purport to be a complete description of all of the provisions of the awards and is qualified in its entirety by reference to the award agreements, the
forms of which are filed as exhibits to the Partnerships Registration Statement on Form S-1 filed on April 13, 2015 and are incorporated herein by reference.
These awards include 736,665 restricted common units subject to limitations on transferability, customary forfeiture provisions, and
service-based graded vesting requirements through April 1, 2019. The board of directors of the General Partner also approved grants of 883,984 restricted performance units (in the form of phantom units) with DERs that are subject to both
performance-based and service-based vesting provisions. The number of common units issued to a recipient upon vesting of a restricted performance unit will be calculated based on performance against certain metrics that relate to the
Partnerships performance over each of the four 12-month performance periods commencing April 1, 2015. The target number of common units subject to each restricted performance unit is one; however, based on the achievement of performance
criteria, the number of common units that may be received in settlement of each restricted performance unit can range from zero to two times the target number. The restricted performance units are eligible to become earned as follows: 16.66%,
16.67%, and 16.67% of the performance units may become earned in each of the 12-month performance periods that end on March 31, 2016, March 31, 2017 and March 31, 2018, respectively. The remaining 50% of the restricted
performance units are eligible to become earned during the final 12-month performance period that ends on March 31, 2019. If the performance criteria are not met for the final performance period, the awards allow for a make-up period ending on
March 31, 2020. Additionally, non-employee directors of the General Partner received a one-time grant totaling 63,156 fully vested common units.
As of the date of this Offer, the Partnership has been advised that of the 32,395 Preferred Units beneficially owned by directors or executive
officers of the General Partner, approximately 8,363 will be tendered pursuant to the Offer. Specifically, Thomas L. Carter, Jr., Chairman, President, and Chief Executive Officer of the General Partner, Alexander Stuart, director of the General
Partner, and Marc Carroll, Senior Vice President, Chief Financial Officer, and Treasurer of the General Partner, have advised the Partnership of their intention to tender 2,250, 6,000, and 113 Preferred Units, respectively, pursuant to the Offer.
These 8,363 units represent 25.8% of the Preferred Units beneficially owned by the General Partners directors and executive officers and 7.1% of the outstanding Preferred Units.
However, these directors and executive officers of the General Partner are not obligated to tender their Preferred Units in the Offer and may
subsequently elect not to tender some or all of such Preferred Units in the Offer. Furthermore, directors or executive officers that previously advised the Partnership of their intention not to tender may subsequently elect to tender some or all of
their Preferred Units in the Offer.
|
11. |
Certain Legal Matters; Regulatory Approvals |
The Partnership is not aware of any
approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of Preferred Units by the Partnership as contemplated herein.
Should any such approval or other action be required, the Partnership currently contemplates that such approval or other action will be sought. The Partnership is unable to predict whether it may determine that it is required to delay the acceptance
for payment of, or payment for, Preferred Units tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained without substantial
25
conditions or that the failure to obtain any such approval or other action might not result in adverse consequences to the Partnerships business. The Partnerships obligations under
the Offer to accept for payment and pay for Preferred Units are subject to certain conditions described in Section 12.
|
12. |
Certain Conditions to the Offer |
Notwithstanding any other provision of the Offer, the
Partnership will not be required to purchase any Preferred Units if (a) such transactions, if consummated, would (i) result in delisting of the Partnerships common units from the NYSE; (b) there is any (i) legal or
regulatory action or proceeding instituted or threatened challenging such transaction, (ii) suspension of or limitation on prices for trading securities generally on the NYSE or other national securities exchange(s) (including NASDAQ),
(iii) declaration of a banking moratorium by federal or state authorities or any suspension of payment by banks in the U.S. or New York, (iv) limitation affecting the Partnership imposed by federal or state authorities on the extension of
credit by lending institutions, (v) outbreak or escalation of hostilities, declaration by the U.S. of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the good faith
judgment of the Board of Directors of the General Partner, impractical or inadvisable to proceed with the Offer, or (vi) other event which, in the judgment of the Board of Directors, would have a material adverse effect on the Partnership if
the Offer was consummated; or (c) the Board of Directors of the General Partner determines in good faith that effecting the Offer would constitute a breach of its fiduciary duty owed to the Partnership or the Preferred Unitholders.
The foregoing conditions are for the sole benefit of the Partnership and may be asserted by the Partnership regardless of the circumstances
(including any action or inaction by the Partnership) giving rise to any such conditions or may be waived by the Partnership in whole or in part at any time and from time to time in its sole and absolute discretion. The failure by the Partnership at
any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. Any determination by the Partnership
concerning the events described in this Section shall be final and binding on all parties.
Notification shall be provided of a material
change in, or waiver of, such conditions, and the Offer may, in certain circumstances, be extended in connection with any such change or waiver.
If the Offer is suspended, postponed, or terminated, the Partnership will provide notice to Preferred Unitholders of such suspension,
postponement, or termination.
The Partnership does not currently anticipate paying any broker or
dealer, commercial bank, trust company, or other person any solicitation fee for any Preferred Units purchased pursuant to the Offer. The Partnership will reimburse such persons for customary handling and mailing expenses incurred in forwarding the
Offer. No such broker, dealer, commercial bank, trust company, or other person has been authorized to act as agent of the Partnership or the Depositary for purposes of the Offer.
The Partnership has retained American Stock Transfer and Trust Company, LLC to act as Depositary. The Depositary will receive reasonable and
customary compensation for its services and will also be reimbursed for certain out of pocket and extraordinary expenses and will be indemnified against certain liabilities by the Partnership.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Preferred Units in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. The Partnership may, in its sole and absolute discretion, take such
action as it may deem necessary to make the Offer in any such jurisdiction.
26
The Partnership is not aware of any jurisdiction in which the making of the Offer or the
acceptance of Preferred Units in connection therewith would not be in compliance with the laws of such jurisdiction. Consequently, the Offer is currently being made to all holders of Preferred Units. However, the Partnership reserves the right to
exclude Preferred Unitholders in any jurisdiction in which it is asserted that the Offer cannot lawfully be made. So long as the Partnership makes a good faith effort to comply with any state law deemed applicable to the Offer, the Partnership
believes that the exclusion of Preferred Unitholders residing in such jurisdiction is permitted under Rule 13e-4(f)(9) promulgated under the Exchange Act.
|
15. |
Contacting the Depositary |
The Letter of Transmittal and any other required documents
should be sent by each Preferred Unitholder to the Depositary as set forth below.
The Depositary for the Offer is:
American Stock Transfer & Trust Company, LLC
(718) 921-8317 or (877) 248-6417
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If delivering by mail: |
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If delivering by hand or courier: |
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American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department P.O. Box 2042
New York, New York 10272-2042 |
|
American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department 6201 15th Avenue
Brooklyn, New York 11219 |
Questions about how to tender your Preferred Units and requests for additional copies of the Offer to Purchase
and the Letter of Transmittal may be directed to the Depositary at the telephone number and locations listed above.
BLACK STONE MINERALS, L.P.
November 6, 2015
27
Exhibit (a)(1)(B)
Letter of Transmittal
to
Tender Series A Preferred Units
of
BLACK STONE MINERALS, L.P.
at $1,000.00 Per Preferred Unit, Plus any Unpaid Yield Accrued Through the Termination of the Tender Offer, in Cash Pursuant to the Offer to
Purchase dated November 6, 2015
The undersigned represents that I (we) have full authority to surrender without restriction the Series A
Preferred Units, par value $1,000.00 per preferred unit, of Black Stone Minerals, L.P. (the Partnership) (the Preferred Units) listed below. You are hereby authorized and instructed to deliver to the address indicated below
(unless otherwise instructed in the boxes in the following page) a check representing a cash payment for the Preferred Units tendered pursuant to this Letter of Transmittal, at a price of $1,000.00 per Preferred Unit, plus any unpaid yield accrued
through the termination of the tender offer, net to the seller in cash, without interest and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated November 6, 2015 (the
Offer to Purchase and, together with this Letter of Transmittal ,the Offer).
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON THURSDAY, DECEMBER 10, 2015, UNLESS THE
OFFER IS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE TERMINATION DATE) OR EARLIER TERMINATED.
Mail or deliver this Letter of Transmittal to:
If delivering by mail, hand, express mail, courier,
or other expedited service:
American Stock Transfer & Trust Company, LLC
Operations Center
Attn:
Reorganization Department
6201 15th Avenue
Brooklyn, New York 11219
Pursuant to the offer of
the Partnership to purchase all of its outstanding Preferred Units, the undersigned surrenders the following Preferred Units:
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DESCRIPTION OF PREFERRED UNITS SURRENDERED |
Name(s) and Address(es) of Registered Owner(s) |
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Preferred Units Surrendered
(attached additional list if necessary) |
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Account Number(s) |
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Number of Preferred Units Surrendered |
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Total Preferred Units |
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PLEASE READ THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL CAREFULLY BEFORE
COMPLETING THIS LETTER OF TRANSMITTAL.
IF YOU WOULD LIKE ADDITIONAL COPIES OF THIS LETTER OF TRANSMITTAL OR ANY OF THE OTHER
OFFERING DOCUMENTS, YOU SHOULD CONTACT THE DEPOSITARY, AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, AT (718) 921-8317 or (877) 248-6417.
You have received this Letter of Transmittal in connection with the offer of Black Stone Minerals, L.P., a Delaware limited partnership (the
Partnership), to purchase all of its outstanding Series A Preferred Units, par value $1,000.00 per preferred unit (the Preferred Units), at a price of $1,000.00 per Preferred Unit, plus any unpaid yield accrued through the
termination of the tender offer, net to the seller in cash, without interest and less any applicable withholding taxes, as described in the Offer to Purchase, dated November 6, 2015 (the Offer to Purchase and, together with this
Letter of Transmittal, the Offer).
If you want to retain the Preferred Units you own, you do not need to take any action. If
you want to participate in the Offer, you should complete this Letter of Transmittal.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
2
Ladies and Gentlemen:
The undersigned hereby tenders to the Partnership, the above-described Preferred Units, par value $1,000.00 per Preferred Unit, at a price of
$1,000.00 per Preferred Unit, plus any unpaid yield accrued through the termination of the tender offer, net to the seller in cash, without interest and less any applicable withholding taxes, on the terms and subject to the conditions set forth in
the Offer to Purchase, receipt of which is hereby acknowledged, and this Letter of Transmittal.
On the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), subject to, and effective upon, acceptance for payment and payment for the Preferred Units validly tendered herewith,
and not properly withdrawn, prior to 5:00 p.m., New York City time, on December 10, 2015, unless extended (the Termination Date), in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or
upon the order of, the Partnership all right, title and interest in and to all of the Preferred Units being tendered hereby. In addition, the undersigned hereby irrevocably appoints American Stock Transfer & Trust Company, LLC (when in its
capacity as transfer agent for the Partnership, AST, otherwise, the Depositary) the true and lawful agent and attorney-in-fact and proxy of the undersigned with respect to such Preferred Units with full power of substitution
(such proxies and power of attorney being deemed to be an irrevocable power coupled with an interest in the tendered Preferred Units) to the full extent of such unitholders rights with respect to such Preferred Units (a) to transfer
ownership of such Preferred Units on the account books maintained by AST, together with all accompanying evidence of transfer and authenticity, to or upon the order of the Partnership upon receipt by the Depositary, as the undersigneds agent,
of the aggregate purchase price with respect to such tendered Preferred Units, (b) to present such Preferred Units for cancellation and transfer on the books of the Partnership, and (c) to receive all benefits and otherwise exercise all
rights of beneficial ownership of such Preferred Units, all in accordance with the terms and subject to the conditions of the Offer.
The
undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign, and transfer the Preferred Units tendered hereby and, when the same are accepted for payment by the Partnership, the Partnership
will acquire good, marketable, and unencumbered title thereto, free and clear of all liens, restrictions, charges, and encumbrances and the same will not be subject to any adverse claim. The undersigned hereby represents and warrants that the
undersigned is the registered owner of the Preferred Units. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or the Partnership to be necessary or desirable to complete the sale, assignment,
and transfer of the Preferred Units tendered hereby.
It is understood that the undersigned will not receive payment for the Preferred
Units unless and until the Preferred Units are accepted for payment and until ownership of the Preferred Units is validly transferred on the account books maintained by AST, and until the same are processed for payment by the Depositary.
IT IS UNDERSTOOD THAT THE METHOD OF DELIVERY OF ALL REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE UNDERSIGNED AND THAT THE RISK OF
LOSS OF SUCH DOCUMENTS SHALL PASS ONLY AFTER THE DEPOSITARY HAS ACTUALLY RECEIVED THE DOCUMENTS. IF DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
All authority conferred or agreed to be conferred pursuant to
this Letter of Transmittal shall not be affected by, and shall survive, the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, trustees in bankruptcy,
personal representatives, successors, and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable.
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The undersigned understands that the acceptance for payment by the Partnership of Preferred Units
tendered pursuant to the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Partnership upon the terms and subject to the conditions of
the Offer.
Unless otherwise indicated herein under Special Payment Instructions, please issue the check for the purchase
price in the name(s) of the registered owner(s) appearing under Description of Preferred Units Tendered. Similarly, unless otherwise indicated under Special Delivery Instructions, please mail the check for the purchase
price to the address(es) of the registered owner(s) appearing under Description of Preferred Units Tendered. In the event that both the Special Delivery Instructions and the Special Payment Instructions are completed, please issue
the check for the purchase price in the name of, and deliver such check to, the person or persons so indicated. Please credit any Preferred Units tendered hereby, but which are not purchased, by crediting the account at AST designated above.
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SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 4, and 5) |
To be completed ONLY if the check for
the purchase price in consideration of Preferred Units accepted for payment is to be issued in the name of someone other than the undersigned.
Issue: ¨ Check to: |
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(Please Print) |
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Address: |
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(Include Zip Code) |
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(Tax Identification or Social Security Number) |
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SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 4, and 5) |
To be completed ONLY if the check for
the purchase price of Preferred Units accepted for payment is to be sent to someone other than the undersigned or to the undersigned at an address other than that shown in the box titled Description of Preferred Units Tendered
above. Deliver: ¨ Check(s)
to: |
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IMPORTANTSIGN HERE
(U.S. Holders Please Also Complete the Enclosed IRS Form W-9)
(Non-U.S. Holders Please Obtain and Complete Applicable IRS Form W-8)
(Signature(s) of Unitholder(s))
Dated:
, 2015
(Must be signed by registered owner(s) exactly as name(s) appear(s) on the account books maintained by AST. If signature is by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please set forth full title and see Instruction 4. For information concerning signature guarantees,
see Instruction 1.) |
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Address: |
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(Include Zip Code) |
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Area Code and Telephone Number: |
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Tax Identification or Social Security No.: |
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GUARANTEE OF SIGNATURE(S)
(For use by Eligible Institutions only;
see Instructions 1 and 4)
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Name of Firm: |
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(Include Zip Code) |
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Name: |
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(Please Type or Print) |
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Area Code and Telephone Number: |
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Place medallion guarantee in space below: |
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INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a
financial institution (including most commercial banks, savings and loan associations, and brokerage houses) that is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the
Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program and the Stock Exchanges Medallion Program (each, an Eligible Institution). Signatures on this Letter of Transmittal need not be
guaranteed (a) if this Letter of Transmittal is signed by the registered owner(s) of Preferred Units tendered herewith and such registered owner has not completed the box titled Special Payment Instructions or the box titled
Special Delivery Instructions on this Letter of Transmittal. See Instruction 4.
2. Delivery of Letter of
Transmittal. This Letter of Transmittal is to be completed by all tendering holders of Preferred Units. A manually executed facsimile of this document may be used in lieu of the original. This Letter of Transmittal properly completed and duly
executed with any required signature guarantees, and any other documents required by this Letter of Transmittal, must be received by the Depositary at its address set forth herein prior to the Termination Date.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING
UNITHOLDER. DELIVERY OF ALL SUCH DOCUMENTS WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional, or contingent
tenders will be accepted and no fractional Preferred Units will be purchased. All tendering unitholders, by execution of this Letter of Transmittal (or facsimile thereof), waive any right to receive any notice of the acceptance of their Preferred
Units for payment.
All questions as to validity, form, and eligibility (including time of receipt) of the surrender of any Preferred
Units hereunder, including questions as to the proper completion or execution of any Letter of Transmittal or other required documents and as to the proper form for transfer of any Preferred Units, will be determined by the Partnership in its sole
and absolute discretion (which may delegate power in whole or in part to the Depositary) which determination will be final and binding. The Partnership reserves the absolute right to reject any and all tenders determined by it not to be in proper
form or the acceptance for payment of or payment for which may be unlawful. The Partnership also reserves the absolute right to waive any defect or irregularity in the surrender of any Preferred Units whether or not similar defects or irregularities
are waived in the case of any other unitholder. A surrender will not be deemed to have been validly made until all defects and irregularities have been cured or waived. The Partnership and the Depositary shall make reasonable efforts to notify any
person of any defect in any Letter of Transmittal submitted to the Depositary.
3. Inadequate Space. If the space provided herein
is inadequate, the account numbers and/or the number of Preferred Units should be listed on a separate schedule attached hereto and separately signed on each page thereof in the same manner as this Letter of Transmittal is signed.
4. Signatures on Letter of Transmittal and Stock Powers. If this Letter of Transmittal is signed by the registered owner(s) of the
Preferred Units tendered hereby, the signature(s) must correspond with the name(s) as appears on the account books maintained by AST without alteration or any other change whatsoever.
If any Preferred Units tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.
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If any tendered Preferred Units are registered in the names of different holder(s), it will be
necessary to complete, sign and submit as many separate Letters of Transmittal (or facsimiles thereof) as there are different registrations of such Preferred Units.
If this Letter of Transmittal or any stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Partnership of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered owner(s) of the Preferred Units listed and transmitted hereby, no separate stock
powers are required unless payment is to be made to a person other than the registered owner(s), in which case the Preferred Units tendered by this Letter of Transmittal must be accompanied by appropriate stock powers signed exactly as the name(s)
of the registered owner(s) or holder(s) appear(s) on the account books maintained by AST. Signatures on such stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the registered owner(s) of the Preferred Unit(s) listed, it must be accompanied
by the appropriate stock powers signed exactly as the name or names of the registered owner(s) or holder(s) appear(s) on the account books of AST. Signatures on such stock powers must be guaranteed by an Eligible Institution.
5. Special Payment and Delivery Instructions. If a check for the purchase price is to be issued to a person other than the signer(s) of
this Letter of Transmittal or delivered to an address other than that shown in the box titled Description of Preferred Units Tendered above, the appropriate boxes on this Letter of Transmittal should be completed.
6. Requests for Assistance or Additional Copies. Questions or requests for assistance may be directed to the Depositary at the address
and phone number set forth below. Additional copies of the Offer to Purchase and this Letter of Transmittal may be obtained from the Depositary, and will be furnished at Partnerships expense.
7. Backup Withholding. Each tendering U.S. Preferred Unitholder is required to provide the Depositary with such U.S. Preferred
Unitholders correct taxpayer identification number (TIN), generally the U.S. Preferred Unitholders social security number or federal employer identification number, on the IRS Form W-9, which is provided under Important
Tax Information below, or alternatively, to establish another basis for exemption from backup withholding. Such U.S. Preferred Unitholder must cross out item (2) in Part II on the IRS Form W-9 if such U.S. Preferred Unitholder is subject
to backup withholding. Failure to provide the information on the IRS Form W-9 may subject the tendering U.S. Preferred Unitholder to 28% backup withholding on the payments made to the U.S. Preferred Unitholder with respect to the Preferred Units
purchased pursuant to the Offer and to a $50 penalty imposed by the IRS. If the tendering U.S. Preferred Unitholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future, the tendering U.S. Preferred
Unitholder should write Applied For in the space provided for the TIN in Part I of the IRS Form W-9. If Applied For is written in the space provided for the TIN in Part I of the IRS Form W9 and the Depositary is not provided
with a TIN by the time of payment, the Depositary will withhold 28% from all such payments with respect to the Preferred Units. Each tendering Non-U.S. Preferred Unitholder must submit an appropriate properly completed IRS Form W-8 certifying, under
penalties of perjury, to such Non-U.S. Preferred Unitholders foreign status in order to establish an exemption from backup withholding. An appropriate IRS Form W-8 may be obtained via the IRS website at the following address:
http://www.irs.gov or from the Depositary.
NOTE: FAILURE TO COMPLETE AND RETURN THE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF A PORTION OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE IMPORTANT TAX INFORMATION SECTION BELOW.
8
8. Waiver of Conditions. Subject to the terms and conditions of the applicable rules and
regulations of the Securities and Exchange Commission, the conditions of the Offer may be waived by the Partnership in whole or in part at any time and from time to time in its sole and absolute discretion.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY EXECUTED FACSIMILE COPY THEREOF) AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY
PRIOR TO THE TERMINATION DATE.
IMPORTANT TAX INFORMATION
To prevent backup withholding, each U.S. Preferred Unitholder whose tendered Preferred Units are accepted for payment is required to provide
the Depositary with such U.S. Preferred Unitholders correct TIN on the IRS Form W-9 below or otherwise establish a basis for exemption from backup withholding. If such U.S. Preferred Unitholder is an individual, the TIN is his or her social
security number or individual taxpayer identification number, as the case may be. If the Depositary is not provided with the TIN, a tendering U.S. Preferred Unitholder may be subject to backup withholding at a rate of 28% with respect to payments
made pursuant to the Offer and a $50 penalty may be imposed on the Preferred Unitholder by the IRS. Failure to comply truthfully with the backup withholding requirements also may result in the imposition of severe criminal and/or civil fines and
penalties.
Certain U.S. Preferred Unitholders (including, among others, generally all corporations) are not subject to these backup
withholding requirements. Exempt U.S. Preferred Unitholders should provide their Exempt Payee Code in the appropriate space on the IRS Form W-9, furnish their TIN and provide all other information required in the IRS Form W-9, complete the
certification in Part II of the IRS Form W-9, and sign, date and return the IRS Form W-9 to the Depositary. See the enclosed Form W-9 for additional instructions.
A tendering Non-U.S. Preferred Unitholder may be subject to backup withholding unless such Non-U.S. Preferred Unitholder submits to the
Depositary an appropriate, properly completed IRS Form W-8, signed under penalties of perjury, certifying to that Preferred Unitholders foreign status. An appropriate Form W-8 can be obtained via the IRS website at www.irs.gov or from
the Depositary.
If backup withholding applies, the Depositary is required to withhold 28% of any payments made to the Preferred
Unitholder. Backup withholding is not an additional U.S. federal income tax. Rather, the U.S. federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund or credit may be obtained from the IRS, provided that the required information is properly furnished to the IRS on a timely basis.
See the section entitled Certain U.S. Federal Income Tax Consequences in the Offer to Purchase for an additional discussion of
certain U.S. federal income tax consequences.
IRS Form W-9
To prevent backup withholding on payments made with respect to Preferred Units purchased pursuant to the Offer, a U.S. Preferred Unitholder is
required to provide the Depositary with either (i) the U.S. Preferred Unitholders correct TIN by completing the IRS Form W-9 below, certifying that the TIN provided on the IRS Form W-9 is correct (or that such U.S. Holder is awaiting a
TIN), that the U.S. Preferred Unitholder is a U.S. person and that (a) the U.S. Preferred Unitholder has not been notified by the IRS that the Preferred Unitholder is subject to backup withholding as a result of a prior failure to report all
interest or distributions or (b) the IRS has notified the U.S. Preferred Unitholder that the U.S. Preferred Unitholder is no longer subject to backup withholding or (c) the U.S. Preferred Unitholder is exempt from backup withholding; or
(ii) other adequate basis for exemption.
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What Number to Give the Depositary
A. U.S. Preferred Unitholder generally is required to give the Depositary the TIN (e.g., social security number, individual taxpayer
identification number or employer identification number) of the Preferred Unitholder. If the Preferred Units are held in more than one name or are not held in the name of the actual owner, consult the enclosed IRS Form W-9 for additional guidance on
which number to report.
Please consult your accountant or tax advisor for further guidance regarding the completion of IRS Form W-9 or
applicable IRS Form W-8 to claim an exemption from backup withholding, or contact the Depositary.
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Form W-9
(Rev. December 2014) Department of the Treasury
Internal Revenue Service |
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Request for Taxpayer
Identification Number and Certification |
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Give form to the requester. Do not send to the IRS. |
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Print or type
See Specific Instructions
on page 2. |
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1 Name (as
shown on your income tax return). Name is required on this line; do not leave this line blank. |
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2 Business
name/disregarded entity name, if different from above |
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3 Check appropriate box for federal tax classification; check only one of the following seven boxes: |
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4 Exemptions (codes apply only to certain entities, not individuals;
see instructions on page 3): Exempt payee code (if any)
Exemption from FATCA reporting code (if any)
(Applies to accounts maintained outside the U.S.) |
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Individual/Sole proprietor or single- member LLC |
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C Corporation |
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S Corporation |
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Partnership |
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Trust/estate |
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Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=partnership) u |
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Note. For a single-member LLC that is disregarded,
do not check LLC; check the appropriate box in the line above for the tax classification of the single-member owner.
Other (see instructions) u |
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5 Address (number, street, and apt. or suite
no.) |
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Requesters name and address (optional) |
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6 City, state, and ZIP code |
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7 List account number(s) here (optional) |
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Part I |
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Taxpayer Identification Number (TIN) |
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Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For
individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other entities, it is your employer identification number (EIN). If
you do not have a number, see How to get a TIN on page 3. Note. If the
account is in more than one name, see the instructions for line 1 and the chart on page 4 for guidelines on whose number to enter. |
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Social security number
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or |
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Employer identification
number |
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Under penalties of perjury, I certify that:
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The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and |
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I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and |
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I am a U.S. citizen or other U.S. person (defined below); and |
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The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. |
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding
because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to
an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions on page 3.
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Sign Here |
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Signature of U.S.
person u |
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Date u |
General Instructions
Section references are to the Internal Revenue Code unless otherwise noted.
Future developments. Information about developments affecting Form W-9 (such as legislation enacted after we release it) is at www.irs.gov/fw9.
Purpose of Form
An individual or entity (Form W-9
requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer
identification number (ATIN), or employer identification number (EIN), to report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns include, but are not limited to,
the following:
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Form 1099-INT (interest earned or paid) |
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Form 1099-DIV (dividends, including those from stocks or mutual funds) |
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Form 1099-MISC (various types of income, prizes, awards, or gross proceeds) |
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Form 1099-B (stock or mutual fund sales and certain other transactions by brokers) |
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Form 1099-S (proceeds from real estate transactions)
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Form 1099-K (merchant card and third party network transactions) |
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Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition) |
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Form 1099-C (canceled debt) |
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Form 1099-A (acquisition or abandonment of secured property) |
Use Form W-9 only if you are a
U.S. person (including a resident alien), to provide your correct TIN.
If you do not return Form W-9 to the requester with a TIN, you
might be subject to backup withholding. See What is backup withholding? on page 2.
By signing the filled-out form, you:
1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued),
2. Certify that you are not subject to backup withholding, or
3. Claim
exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on
foreign partners' share of effectively connected income, and
4. Certify that FATCA code(s) entered on this form (if any) indicating that
you are exempt from the FATCA reporting, is correct. See What is FATCA reporting? on page 2 for further information.
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Cat. No. 10231X |
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Form W-9 (Rev. 12-2014) |
Form W-9 (Rev. 12-2014) |
Page 2 |
Note. If you are a U.S. person and a requester gives you a form other than Form W-9 to request your TIN,
you must use the requesters form if it is substantially similar to this Form W-9.
Definition of a U.S. person. For federal tax purposes, you
are considered a U.S. person if you are:
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An individual who is a U.S. citizen or U.S. resident alien; |
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A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States; |
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An estate (other than a foreign estate); or |
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A domestic trust (as defined in Regulations section 301.7701-7). |
Special rules for partnerships.
Partnerships that conduct a trade or business in the United States are generally required to pay a withholding tax under section 1446 on any foreign partners share of effectively connected taxable income from such business. Further, in certain
cases where a Form W-9 has not been received, the rules under section 1446 require a partnership to presume that a partner is a foreign person, and pay the section 1446 withholding tax. Therefore, if you are a U.S. person that is a partner in a
partnership conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your U.S. status and avoid section 1446 withholding on your share of partnership income.
In the cases below, the following person must give Form W-9 to the partnership for purposes of establishing its U.S. status and avoiding
withholding on its allocable share of net income from the partnership conducting a trade or business in the United States:
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In the case of a disregarded entity with a U.S. owner, the U.S. owner of the disregarded entity and not the entity; |
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In the case of a grantor trust with a U.S. grantor or other U.S. owner, generally, the U.S. grantor or other U.S. owner of the grantor trust and not the trust; and |
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In the case of a U.S. trust (other than a grantor trust), the U.S. trust (other than a grantor trust) and not the beneficiaries of the trust. |
Foreign person. If you are a foreign person or the U.S. branch of a foreign bank that has elected to be treated as a U.S. person, do not use Form W-9.
Instead, use the appropriate Form W-8 or Form 8233 (see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities).
Nonresident
alien who becomes a resident alien. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a
saving clause. Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of income even after the payee has otherwise become a U.S. resident alien for tax purposes.
If you are a U.S. resident alien who is relying on an exception contained in the saving clause of a tax treaty to claim an exemption from U.S.
tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items:
1. The treaty country.
Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien.
2. The treaty article addressing
the income.
3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions.
4. The type and amount of income that qualifies for the exemption from tax.
5. Sufficient facts to justify the exemption from tax under the terms of the treaty article.
Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese
student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to the
U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese student who qualifies for this exception (under paragraph
2 of the first protocol) and is relying on this exception to claim an exemption from tax on his or her scholarship or fellowship income would attach to Form W-9 a statement that includes the information described above to support that exemption.
If you are a nonresident alien or a foreign entity, give the requester the appropriate completed
Form W-8 or Form 8233.
Backup Withholding
What is
backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS 28% of such payments. This is called backup withholding. Payments that may be subject to backup withholding include
interest, tax-exempt interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, payments made in settlement of payment card and third party network transactions, and certain payments from fishing boat operators.
Real estate transactions are not subject to backup withholding.
You will not be subject to backup withholding on payments you receive if
you give the requester your correct TIN, make the proper certifications, and report all your taxable interest and dividends on your tax return.
Payments
you receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester,
2. You do not certify your TIN when required (see the Part II instructions on page 3 for details),
3. The IRS tells the requester that you furnished an incorrect TIN,
4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return
(for reportable interest and dividends only), or
5. You do not certify to the requester that you are not subject to backup withholding
under 4 above (for reportable interest and dividend accounts opened after 1983 only).
Certain payees and payments are exempt from backup
withholding. See Exempt payee code on page 3 and the separate Instructions for the Requester of Form W-9 for more information.
Also
see Special rules for partnerships above.
What is FATCA reporting?
The Foreign Account Tax Compliance Act (FATCA) requires a participating foreign financial institution to report all United States account holders that are
specified United States persons. Certain payees are exempt from FATCA reporting. See Exemption from FATCA reporting code on page 3 and the Instructions for the Requester of Form W-9 for more information.
Updating Your Information
You must provide updated
information to any person to whom you claimed to be an exempt payee if you are no longer an exempt payee and anticipate receiving reportable payments in the future from this person. For example, you may need to provide updated information if you are
a C corporation that elects to be an S corporation, or if you no longer are tax exempt. In addition, you must furnish a new Form W-9 if the name or TIN changes for the account; for example, if the grantor of a grantor trust dies.
Penalties
Failure to furnish TIN. If you fail to
furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.
Civil penalty for false information with respect to withholding. If you make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
Criminal penalty for falsifying information. Willfully falsifying certifications or affirmations may
subject you to criminal penalties including fines and/or imprisonment.
Misuse of TINs. If the requester discloses or uses TINs in violation of
federal law, the requester may be subject to civil and criminal penalties.
Specific Instructions
Line 1
You must enter one of the following on this
line; do not leave this line blank. The name should match the name on your tax return.
If this Form W-9 is for a joint account, list
first, and then circle, the name of the person or entity whose number you entered in Part I of Form W-9.
Form W-9 (Rev. 1-2011) |
Page 3 |
a. Individual. Generally, enter the name shown on your tax return. If you have changed
your last name without informing the Social Security Administration (SSA) of the name change, enter your first name, the last name as shown on your social security card, and your new last name.
Note. ITIN applicant: Enter your individual name as it was entered on your Form W-7 application, line 1a. This should also be the same as the name you
entered on the Form 1040/1040A/1040EZ you filed with your application.
b. Sole proprietor or single-member LLC. Enter your
individual name as shown on your 1040/1040A/1040EZ on line 1. You may enter your business, trade, or doing business as (DBA) name on line 2.
c. Partnership, LLC that is not a single-member LLC, C Corporation, or S Corporation. Enter the entitys name as shown on the
entitys tax return on line 1 and any business, trade, or DBA name on line 2.
d. Other entities. Enter your name as shown on
required U.S. federal tax documents on line 1. This name should match the name shown on the charter or other legal document creating the entity. You may enter any business, trade, or DBA name on line 2.
e. Disregarded entity. For U.S. federal tax purposes, an entity that is disregarded as an entity separate from its owner is treated as a
disregarded entity. See Regulations section 301.7701-2(c)(2)(iii). Enter the owners name on line 1. The name of the entity entered on line 1 should never be a disregarded entity. The name on line 1 should be the name shown on the
income tax return on which the income should be reported. For example, if a foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes has a single owner that is a U.S. person, the U.S. owners name is required to be
provided on line 1. If the direct owner of the entity is also a disregarded entity, enter the first owner that is not disregarded for federal tax purposes. Enter the disregarded entitys name on line 2, Business name/disregarded entity
name. If the owner of the disregarded entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a U.S. TIN.
Line 2
If you have a business name, trade name, DBA name,
or disregarded entity name, you may enter it on line 2.
Line 3
Check the appropriate box in line 3 for the U.S. federal tax classification of the person whose name is entered on line 1. Check only one box in line 3.
Limited Liability Company (LLC). If the name on line 1 is an LLC treated as a partnership for U.S. federal tax purposes, check the Limited
Liability Company box and enter P in the space provided. If the LLC has filed Form 8832 or 2553 to be taxed as a corporation, check the Limited Liability Company box and in the space provided enter C for C
corporation or S for S corporation. If it is a single-member LLC that is a disregarded entity, do not check the Limited Liability Company box; instead check the first box in line 3 Individual/sole proprietor or
single-member LLC.
Line 4, Exemptions
If you
are exempt from backup withholding and/or FATCA reporting, enter in the appropriate space in line 4 any code(s) that may apply to you.
Exempt payee
code.
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Generally, individuals (including sole proprietors) are not exempt from backup withholding. |
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Except as provided below, corporations are exempt from backup withholding for certain payments, including interest and dividends. |
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Corporations are not exempt from backup withholding for payments made in settlement of payment card or third party network transactions. |
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Corporations are not exempt from backup withholding with respect to attorneys fees or gross proceeds paid to attorneys, and corporations that provide medical or health care services are not exempt with respect to
payments reportable on Form 1099-MISC. |
The following codes identify payees that are exempt from backup withholding. Enter the
appropriate code in the space in line 4.
1An organization exempt from tax under section 501(a), any IRA, or a custodial account under
section 403(b)(7) if the account satisfies the requirements of section 401(f)(2)
2The United States or any of its agencies or instrumentalities
3A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
4A foreign government or any of its political subdivisions, agencies, or instrumentalities
5A corporation
6A
dealer in securities or commodities required to register in the United States, the District of Columbia, or a U.S. commonwealth or possession
7A futures commission merchant registered with the Commodity Futures Trading Commission
8A real estate investment trust
9An entity registered at all times during the tax year under the Investment Company Act of 1940
10A common trust fund operated by a bank under section 584(a)
11A financial institution
12A middleman known in the investment community as a nominee or custodian
13A trust exempt from tax under section 664 or described in section 4947
The following chart shows types of payments that may be exempt from backup withholding. The chart applies to the exempt payees listed above, 1
through 13.
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IF the payment is for . . . |
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THEN the payment is exempt for . . . |
Interest and dividend payments |
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All exempt payees except for 7 |
Broker transactions |
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Exempt payees 1 through 4 and 6 through 11 and all C corporations. S corporations must not enter an exempt payee code because they are exempt only for sales of noncovered securities
acquired prior to 2012. |
Barter exchange transactions and patronage dividends |
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Exempt payees 1 through 4 |
Payments over $600 required to be reported and direct sales over $5,0001 |
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Generally, exempt payees
1 through 52 |
Payments made in settlement of payment card or third party network transactions |
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Exempt payees 1 through 4 |
1 |
See Form 1099-MISC, Miscellaneous Income, and its instructions. |
2 |
However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys fees, gross proceeds paid to an attorney
reportable under section 6045(f), and payments for services paid by a federal executive agency. |
Exemption from FATCA reporting code.
The following codes identify payees that are exempt from reporting under FATCA. These codes apply to persons submitting this form for accounts maintained outside of the United States by certain foreign financial institutions. Therefore, if you are
only submitting this form for an account you hold in the United States, you may leave this field blank. Consult with the person requesting this form if you are uncertain if the financial institution is subject to these requirements. A requester may
indicate that a code is not required by providing you with a Form W-9 with Not Applicable (or any similar indication) written or printed on the line for a FATCA exemption code.
AAn organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37)
BThe United States or any of its agencies or instrumentalities
CA state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
DA corporation the stock of which is regularly traded on one or more established securities markets, as described in Regulations section
1.1472-1(c)(1)(i)
EA corporation that is a member of the same expanded affiliated group as a corporation described in Regulations
section 1.1472-1(c)(1)(i)
FA dealer in securities, commodities, or derivative financial
instruments (including notional principal contracts, futures, forwards,
Form W-9 (Rev. 12-2014) |
Page 4 |
and options) that is registered as such under the laws of the United States or any state
GA real estate investment trust
HA regulated investment company as defined in section 851 or an entity registered at all times during the tax year under the Investment
Company Act of 1940
IA common trust fund as defined in section 584(a)
JA bank as defined in section 581
KA broker
LA trust
exempt from tax under section 664 or described in section 4947(a)(1)
MA tax exempt trust under a section 403(b) plan or section
457(g) plan
Note. You may wish to consult with the financial institution requesting this form to determine whether the FATCA code and/or exempt
payee code should be completed.
Line 5
Enter your
address (number, street, and apartment or suite number). This is where the requester of this Form W-9 will mail your information returns.
Line 6
Enter your city, state, and ZIP code.
Part I.
Taxpayer Identification Number (TIN)
Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible
to get an SSN, your TIN is your IRS individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below.
If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN. However, the IRS prefers that you use your SSN.
If you are a single-member LLC that is disregarded as an entity separate from its owner (see Limited Liability Company (LLC) on this
page), enter the owners SSN (or EIN, if the owner has one). Do not enter the disregarded entitys EIN. If the LLC is classified as a corporation or partnership, enter the entitys EIN.
Note. See the chart on page 4 for further clarification of name and TIN combinations.
How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security Card, from
your local SSA office or get this form online at www.ssa.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN, or Form SS-4, Application
for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/businesses and clicking on Employer Identification Number (EIN) under Starting a Business. You can get Forms
W-7 and SS-4 from the IRS by visiting IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).
If you are asked to complete Form W-9 but do
not have a TIN, apply for a TIN and write Applied For in the space for the TIN, sign and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable
instruments, generally you will have 60 days to get a TIN and give it to the requester before you are subject to backup withholding on payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on
all such payments until you provide your TIN to the requester.
Note. Entering Applied For means that you have already applied for a TIN
or that you intend to apply for one soon.
Caution: A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8.
Part II. Certification
To establish to the withholding
agent that you are a U.S. person, or resident alien, sign Form W-9. You may be requested to sign by the withholding agent even if items 1, 4, or 5 below indicate otherwise.
For a joint account, only the person whose TIN is shown in Part I should sign (when required). In the case of a disregarded entity, the person
identified on line 1 must sign. Exempt payees, see Exempt payee code earlier.
Signature requirements. Complete the
certification as indicated in items 1 through 5 below.
1. Interest, dividend, and barter exchange accounts opened before 1984 and broker accounts
considered active during 1983. You must give your correct TIN, but you do not have to sign the certification.
2. Interest, dividend,
broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely
providing your correct TIN to the requester, you must cross out item 2 in the certification before signing the form.
3. Real estate
transactions. You must sign the certification. You may cross out item 2 of the certification.
4. Other payments. You must give
your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN. Other payments include payments made in the course of the requesters trade or business
for rents, royalties, goods (other than bills for merchandise), medical and health care services (including payments to corporations), payments to a nonemployee for services, payments made in settlement of payment card and third party network
transactions, payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations).
5. Mortgage interest paid by you, acquisition or abandonment of secured property, cancellation of debt, qualified tuition program payments
(under section 529), IRA, Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, but you do not have to sign the certification.
What Name and Number To Give the Requester
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For this type of account: |
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Give name and SSN of: |
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1. |
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Individual |
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The individual |
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2. |
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Two or more individuals (joint account) |
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The actual owner of the account or, if combined funds, the first individual on the account 1 |
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3. |
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Custodian account of a minor (Uniform Gift to Minors Act) |
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The minor 2 |
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4. |
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a. The usual revocable savings trust (grantor is also trustee) |
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The grantor-trustee 1 |
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b. So-called trust account that is not a legal or valid trust under state law |
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The actual owner 1 |
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5. |
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Sole proprietorship or disregarded entity owned by an individual |
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The owner 3 |
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6. |
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Grantor trust filing under Optional Form 1099 Filing Method 1 (see Regulation section 1.671-4(b)(2)(i)(A)) |
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The grantor * |
For this type of account: |
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Give name and EIN of: |
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7. |
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Disregarded entity not owned by an individual |
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The owner |
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8. |
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A valid trust, estate, or pension trust |
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Legal entity 4 |
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9. |
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Corporation or LLC electing corporate status on Form 8832 or Form 2553 |
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The corporation |
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10. |
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Association, club, religious, charitable, educational, or other tax-exempt organization |
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The organization |
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11. |
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Partnership or multi-member LLC |
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The partnership |
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12. |
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A broker or registered nominee |
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The broker or nominee |
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13. |
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Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments |
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The public entity |
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14. |
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Grantor trust filing under the Form 1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulation section 1.671-4(b)(2)(i)(B)) |
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The trust |
3 |
You must show your individual name and you may also enter your business or DBA name on the Business name/disregarded entity name line. You may use either your SSN or EIN (if you have one), but the IRS
encourages you to use your SSN. |
Form W-9 (Rev. 12-2014) |
Page 5 |
4 |
List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) Also
see Special rules for partnerships on page 2. |
*Note. Grantor also must provide a Form W-9 to trustee of trust.
Note. If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed.
Secure Your Tax Records from Identity Theft
Identity theft
occurs when someone uses your personal information such as your name, SSN, or other identifying information, without your permission, to commit fraud or other crimes. An identity thief may use your SSN to get a job or may file a tax return using
your SSN to receive a refund.
To reduce your risk:
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Ensure your employer is protecting your SSN, and |
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Be careful when choosing a tax preparer. |
If your tax records are affected by identity theft and
you receive a notice from the IRS, respond right away to the name and phone number printed on the IRS notice or letter.
If your tax records
are not currently affected by identity theft but you think you are at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Theft Hotline at 1-800-908-4490 or submit Form 14039.
For more information, see Publication 4535, Identity Theft Prevention and Victim Assistance.
Victims of identity theft who are experiencing economic harm or a system problem, or are seeking
help in resolving tax problems that have not been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD
1-800-829-4059.
Protect yourself from suspicious emails or phishing schemes. Phishing is the creation and use of email and websites designed to
mimic legitimate business emails and websites. The most common act is sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for
identity theft.
The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information
through email or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.
If you receive an unsolicited email claiming to be from the IRS, forward this message to phishing@irs.gov. You may also report misuse of
the IRS name, logo, or other IRS property to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484. You can forward suspicious emails to the Federal Trade Commission at: spam@uce.gov or contact them at
www.ftc.gov/idtheft or 1-877-IDTHEFT (1-877-438-4338).
Visit IRS.gov to learn more about identity theft and how to reduce your risk.
Privacy Act Notice
Section 6109 of the Internal
Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid;
the acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS,
reporting the above information. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities, states, the District of Columbia, and U.S. commonwealths and possessions for use in
administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You
must provide your TIN whether or not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer.
Certain penalties may also apply for providing false or fraudulent information.
1 |
List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that persons number must be furnished. |
2 |
Circle the minors name and furnish the minors SSN. |
The Depositary for the Offer to Purchase is:
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If delivering by mail:
American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department P.O. Box 2042
New York, New York 10272-2042 |
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If delivering by hand or courier:
American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department 6201 15th Avenue
Brooklyn, New York 11219 |
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
Any questions or requests for assistance may be directed to the Depositary at its telephone number and location listed above. Requests for
additional copies of this Offer to Purchase and the Letter of Transmittal may be directed to the Depositary at its telephone number and location listed above.
16
Exhibit (a)(5)(A)
News
For Immediate Release
Black
Stone Minerals, L.P. Announces Commencement of Cash Tender Offer
to Repurchase up to 100% of its Series A Preferred Units
HOUSTON, November 6, 2015 (BUSINESS WIRE) Black Stone Minerals, L.P. (NYSE: BSM) (Black Stone Minerals, BSM, or the
partnership) announced today that it has commenced its previously announced 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 tender offer will expire at 5:00 p.m., New York City time, on Thursday, December 10, 2015, unless extended by the partnership. Tenders of preferred units
must be made on or prior to the expiration of the tender offer and may be withdrawn at any time prior to the expiration of the tender offer, in each case, in accordance with the procedures described in the tender offer materials. The partnership
intends to fund the tender offer with funds available under its revolving credit facility or cash on hand.
Information Regarding the Tender Offer
Black Stone Minerals has commenced a cash tender 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 tender offer will expire at 5:00 p.m., New York City time, on Thursday, December 10, 2015, unless extended by the partnership. Tenders of preferred units must be made on or prior to the expiration
of the tender offer and may be withdrawn at any time prior to the expiration of the tender offer, in each case, in accordance with the procedures described in the tender offer materials.
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 offers terms and conditions
are described in the Offer to Purchase, the related Letter of Transmittal, and other materials relating to the tender offer that are being distributed to the preferred unitholders. American Stock Transfer & Trust Company, LLC will serve as
the depositary for the tender offer.
While the Board of Directors of BSMs general partner has authorized the partnership to make the tender offer,
neither the partnership, its general partner, nor its general partners 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 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 BSMs preferred units. The offer to purchase and solicitation of
preferred units is being made only pursuant to the 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 are being distributed to the preferred unitholders. Preferred unitholders should read those materials carefully before making any decisions with respect to the tender offer because they contain important information, including instructions
on how to tender the preferred units. BSM is also filing 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 SECs 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 partnerships 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:
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the partnerships ability to execute its business strategies; |
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the volatility of realized oil and natural gas prices; |
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the level of production on the partnerships properties; |
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regional supply and demand factors, delays, or interruptions of production; |
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the partnerships ability to replace its oil and natural gas reserves; and |
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the partnerships 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.
Contact
Brent Collins
Vice President, Investor Relations
Telephone:
(713) 445-3200
investorrelations@blackstoneminerals.com
Black Stone Minerals (NYSE:BSM)
과거 데이터 주식 차트
부터 8월(8) 2024 으로 9월(9) 2024
Black Stone Minerals (NYSE:BSM)
과거 데이터 주식 차트
부터 9월(9) 2023 으로 9월(9) 2024