BP Midstream Partners LP offered details on its planned IPO of spun-off BP plc midstream assets in an SEC form filed Oct. 16.
The new partnership plans to sell 42,500,000 units priced between $19 and $21. Including the underwriters' overallotment option to purchase up to an additional 6,375,000 units, the IPO would raise up to $1.03 billion at the high end of the price range.
Following an announcement in July that BP was considering spinning off midstream assets to improve valuation and grow business, BP Midstream in September registered up to $100 million of common units. MUFG Securities Americas Inc. equity analyst Barrett Blaschke told S&P Global Market Intelligence at the time that BP Midstream's IPO would attract investors looking for a safe and steady bet.
"BP to me looks very right up the middle," he said. "Massive sponsor, drop-down story, very controlled — that to me is the low-risk end of the IPO market."
The new MLP would have ownership interests in an onshore crude oil pipeline system; an onshore refined products pipeline system; an onshore diluent pipeline system delivering to or from BP's Whiting Refinery in Whiting, Ind.; four offshore crude oil pipeline systems; and an offshore natural gas pipeline system running between production areas in the Gulf of Mexico and Gulf Coast refining and distribution hubs.
At the transaction's close, BP would own the MLP's general partner and all incentive distribution rights, in addition to a majority of its limited partner interests.
Citigroup, Goldman Sachs and Morgan Stanley are acting as book-running managers for the IPO, with Citigroup as the structuring agent.