Shell Midstream Partners LP, the pipeline company backed by Europe’s biggest oil company, raised $920 million in its initial public offering in the US, pricing shares above the marketed range.
Shell Midstream sold 40 million shares for $23 each, after offering 37.5 million shares for $19 to $21 apiece, according to a statement yesterday. The shares, listed on the New York Stock Exchange under the ticker SHLX, will start trading today.
The Houston-based company will use proceeds from the share offering to make a payment to Royal Dutch Shell Plc (RDSA), which remains its largest shareholder with about 71 percent of the company. Shell Chief Executive Officer Ben Van Beurden, who took the helm this year, is looking to shed about $15 billion in assets through 2015 to focus on projects with the highest investor returns.
Shell Midstream owns stakes in assets including the Houston-to-Houma, or Ho-Ho, pipeline, an offshore pipeline to the Mars field in the Gulf of Mexico, and two that deliver fuel through the eastern U.S. The Hague-based Shell operates the pipelines.
Shell Midstream will operate as a master-limited partnership, or MLP, which is exempt from federal taxes and returns almost all income to shareholders. The Ho-Ho pipeline is expected to account for 62 percent of cash available for distribution, the largest contribution, in the year through September 2015, the filing shows.
Barclays Plc (BARC) and Citigroup Inc. (C) managed the sale.
