What is EQT actually selling to Blackstone, and what does EQT keep?

EQT is contributing its ownership interests in MVP Series A, FERC-regulated transmission and storage assets, and the Hammerhead Pipeline to a new JV. BXCI receives a non-controlling common equity stake for $3.5 billion cash. EQT retains rights to growth projects tied to these assets, including the planned MVP expansion and MVP Southgate, which the filing presents as a key benefit.

Why does the $8.8 billion JV valuation matter for investors?

The valuation is derived by dividing projected 2025-2029 average JV free cash flow by a target return, and the 12x EBITDA multiple is derived from projected EBITDA. These are company-derived projections, not market prices, so investors should weigh the assumptions. The $3.5 billion cash figure is the firm transaction value.

Will all the EQM notes be repurchased, and how much will holders receive?

Not necessarily. The tender is capped at $1.275 billion aggregate, and the 2030 notes are capped at $300 million, so proration is possible. Holders who tender by December 9, 2024 receive the total consideration (for example, $1,057.50 per $1,000 for the 2048 notes), including a $50 early premium. Those who tender later receive only the tender offer consideration, and may receive nothing if the offer is fully subscribed before the early deadline. Accrued interest is paid in addition.

What happens to holders who do not tender their 2028 or 2048 notes?

If the consents from a majority of each series are obtained, EQM will sign supplemental indentures promptly after the expiration date. Those amendments will bind holders who did not tender, changing EQM's reporting obligation to EQT's reporting. Holders of the 2029 and 2030 notes are not being asked to consent, and those indentures are not being amended.

Is the deal certain to close, and what are the main risks?

The JV is expected to close in Q4 2024, but it remains subject to customary closing adjustments and regulatory approvals. The tender offer is conditioned on the JV closing and on EQM obtaining at least $2.3 billion of bridge facility borrowings. EQM may waive conditions, extend, or amend the offer. The forward-looking statements also flag risks around the Equitrans integration, commodity prices, and regulatory actions, so investors should review the Risk Factors sections of EQT's 10-K and 10-Q.

EQT 8-K: Regulation FD — Nov 25, 2024

01—Abstract

Summary

Summary of the 8-K filed November 25, 2024. Cited figures are marked; the original filing is the authoritative source.

EQT Corporation announced a definitive agreement to form a midstream joint venture with funds managed by Blackstone Credit & Insurance (BXCI).

The JV will hold EQT's interests in Mountain Valley Pipeline Series A, FERC-regulated transmission and storage assets, and the Hammerhead Pipeline. BXCI will provide $3.5 billion^a of cash in exchange for a non-controlling common equity interest, implying a total JV valuation of about $8.8 billion, or roughly 12x projected EBITDA. EQT keeps the rights to growth projects tied to these assets, including the planned MVP expansion and MVP Southgate.

The company expects to close in Q4 2024, subject to customary adjustments and regulatory approvals. The transaction is the centerpiece of EQT's deleveraging plan. Proceeds will repay the term loan and revolver and fund debt retirement.

Together with the announced sale of its remaining non-operated northeast Pennsylvania assets, EQT expects to exit 2024 with approximately $9 billion^b of net debt. EQT says announced divestitures total $5.25 billion, above its $3-5 billion asset sale target and ahead of schedule. Management frames the equity financing as priced well below EQT's own cost of equity.

Alongside the JV, EQM Midstream Partners, LP, an EQT subsidiary, launched a cash tender offer for up to $1.275 billion^c of its senior notes due 2028, 2029, 2030, and 2048, with an early tender deadline of December 9, 2024 and expiration on December 30, 2024. EQM also sought consents to amend the reporting covenants in the 2028 and 2048 indentures so EQT, rather than EQM, provides the required reports.

EQM plans to redeem its 2025 and 2026 notes ($900 million^d combined) on December 30, 2024. The tender is funded by a $2.3 billion bridge facility, expected to be repaid from JV proceeds, and is conditioned on the JV closing.

02—Key points

Key Highlights

Blackstone Credit & Insurance will invest $3.5 billion cash for a non-controlling equity interest in a midstream JV holding MVP Series A, FERC-regulated transmission and storage assets, and the Hammerhead Pipeline.
Implied JV valuation of about $8.8 billion, or roughly 12x projected 2025-2029 average EBITDA, based on a target return applied to projected free cash flow.
EQT retains the rights to growth projects, including the MVP expansion and MVP Southgate, and says it preserves Equitrans synergy capture.
EQT expects to exit 2024 with approximately $9 billion of net debt pro forma for the JV and the northeast Pennsylvania divestiture; announced divestitures total $5.25 billion versus a $3-5 billion target.
EQM tender offer for up to $1.275 billion of 2028, 2029, 2030, and 2048 notes, with a $50 per $1,000 early tender premium and a $300 million cap on the 2030 notes; the 2048 notes carry the highest acceptance priority.
Consent solicitation would shift the reporting covenant for the 2028 and 2048 notes from EQM to EQT; holders who tender must also consent.
Redemption of $400 million 6.000% notes due 2025 and $500 million 4.125% notes due 2026 on December 30, 2024; the tender and JV closing are key conditions and timing risks.

03—Questions

Frequently Asked Questions

What is EQT actually selling to Blackstone, and what does EQT keep?
EQT is contributing its ownership interests in MVP Series A, FERC-regulated transmission and storage assets, and the Hammerhead Pipeline to a new JV. BXCI receives a non-controlling common equity stake for $3.5 billion cash. EQT retains rights to growth projects tied to these assets, including the planned MVP expansion and MVP Southgate, which the filing presents as a key benefit.
Why does the $8.8 billion JV valuation matter for investors?
The valuation is derived by dividing projected 2025-2029 average JV free cash flow by a target return, and the 12x EBITDA multiple is derived from projected EBITDA. These are company-derived projections, not market prices, so investors should weigh the assumptions. The $3.5 billion cash figure is the firm transaction value.
Will all the EQM notes be repurchased, and how much will holders receive?
Not necessarily. The tender is capped at $1.275 billion aggregate, and the 2030 notes are capped at $300 million, so proration is possible. Holders who tender by December 9, 2024 receive the total consideration (for example, $1,057.50 per $1,000 for the 2048 notes), including a $50 early premium. Those who tender later receive only the tender offer consideration, and may receive nothing if the offer is fully subscribed before the early deadline. Accrued interest is paid in addition.
What happens to holders who do not tender their 2028 or 2048 notes?
If the consents from a majority of each series are obtained, EQM will sign supplemental indentures promptly after the expiration date. Those amendments will bind holders who did not tender, changing EQM's reporting obligation to EQT's reporting. Holders of the 2029 and 2030 notes are not being asked to consent, and those indentures are not being amended.
Is the deal certain to close, and what are the main risks?
The JV is expected to close in Q4 2024, but it remains subject to customary closing adjustments and regulatory approvals. The tender offer is conditioned on the JV closing and on EQM obtaining at least $2.3 billion of bridge facility borrowings. EQM may waive conditions, extend, or amend the offer. The forward-looking statements also flag risks around the Equitrans integration, commodity prices, and regulatory actions, so investors should review the Risk Factors sections of EQT's 10-K and 10-Q.

04—Continue

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