Sec Form 13D Filing - CNX Resources Corp (CNX) filing for CNX Midstream Partners LP (CNXM) - 2020-07-27

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

Information to be Included in Statements Filed Pursuant to § 240.13d-1(a) and

Amendments Thereto Filed Pursuant to § 240.13d-2(a)

Under the Securities Exchange Act of 1934

(Amendment No. 4)

CNX MIDSTREAM PARTNERS LP

(Name of Issuer)

Common Units Representing Limited Partner Interests

(Title of Class of Securities)

12654A101

(CUSIP Number)

Donald W. Rush

CNX Midstream GP LLC

CNX Center

1000 CONSOL Energy Drive

Canonsburg, Pennsylvania 15317-6506

(724) 485-4000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

July 26, 2020

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box.  ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (“Act”), or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

Explanatory Note

This Amendment No. 4 (this “Amendment”) amends and supplements the statement on Schedule 13D filed on November 23, 2016 (as amended to date, the “Schedule 13D”) with the Securities and Exchange Commission relating to the common units representing limited partner interests (the “Common Units”) in CNX Midstream Partners LP, a Delaware limited partnership (the “Issuer”). Capitalized terms used herein which are not defined herein have the meanings set forth in the Schedule 13D.

Item 2 of the Schedule 13D is hereby amended to add CNX Gas Holdings, Inc. (“Holdings”) as a Reporting Person. In addition, Schedule I to the Schedule 13D is hereby amended and restated in its entirety to provide the information required by subparagraphs (a), (c) and (f) of this Item with respect to the directors and executive officers of the Reporting Persons, and such information is incorporated herein by reference.

Item 3 of the Schedule 13D is hereby supplemented as follows:

On July 26, 2020, immediately prior to the execution of the Merger Agreement (as defined below), CNX Gas Company LLC contributed 897,992 Common Units to Holdings in exchange for 100 shares of common stock, par value $0.01 per share, of Holdings, which comprise 100% of the outstanding capital stock of Holdings.

Item 4 of the Schedule 13D is hereby amended and supplemented as follows:

Merger Agreement

On July 26, 2020, the Issuer entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CNX Resources Corporation, CNX Resources Holdings LLC (“Merger Sub”) and CNX Midstream GP LLC (the “General Partner”). Pursuant to the Merger Agreement, Merger Sub will merge with and into the Issuer, with the Issuer surviving as an indirect wholly owned subsidiary of CNX Resources Corporation (the “Merger”).

Under the terms of the Merger Agreement, at the effective time of the Merger, (i) each outstanding Common Unit other than Common Units owned by CNX Resources Corporation and its subsidiaries, including the Reporting Persons (each, a “Public Common Unit”) will be converted into the right to receive 0.88 shares of common stock, par value $0.01 per share, of CNX Resources Corporation (the “CNX Common Stock” and the shares of CNX Common Stock to be issued in the Merger, the “Merger Consideration”) and (ii) (x) each of the phantom units and any other awards issued under a Partnership Long-Term Incentive Plan (each a “Partnership LTIP Award”) (other than the Director LTIP Awards (as defined below)), whether or not vested,

that is outstanding immediately prior to the effective time of the Merger, will cease to relate to or represent any right to receive Common Units and will be converted into an equivalent award of restricted stock units relating to CNX Common Stock on the same terms and conditions as were applicable to the corresponding Partnership LTIP Award, including any applicable payment timing provisions and dividend equivalent rights, as applicable, subject to the terms of the Merger Agreement and (y) each Partnership LTIP Award held by a non-employee director whose service to the Issuer or its affiliates will terminate upon the consummation of the Merger (each a “Director LTIP Award”) will become fully vested and will be automatically converted into the right to receive, with respect to each Common Unit subject thereto, the Merger Consideration (plus any accrued but unpaid amounts in relation to distribution equivalent rights). Except for the Class B units representing limited partner interests in the Issuer, which shall automatically be canceled immediately prior to the effective time of the Merger for no consideration in accordance with the Third Amended and Restated Agreement of Limited Partnership of CNX Midstream Partners LP, dated as of January 29, 2020, the interests in the Issuer owned by CNX Resources Corporation and its subsidiaries will remain outstanding as limited partner interests in the surviving entity. The General Partner will continue to own the non-economic general partner interest in the surviving entity.

The Merger Agreement contains customary representations and warranties from the parties, and each party has agreed to customary covenants, including, among others, covenants relating to (1) the conduct of business during the interim period between the execution of the Merger Agreement and the effective time of the Merger and (2) the obligation to use reasonable best efforts to cause the Merger to be consummated.

Completion of the Merger is subject to certain customary conditions, including, among others: (1) the receipt of Written Consent (as defined below); (2) there being no law or injunction prohibiting consummation of the transactions contemplated under the Merger Agreement; (3) the effectiveness of a registration statement on Form S-4 relating to the shares of CNX Common Stock to be issued pursuant to the Merger Agreement; (4) approval for listing on the New York Stock Exchange of the shares of CNX Common Stock to be issued pursuant to the Merger Agreement; (5) subject to specified materiality standards, the accuracy of certain representations and warranties of the other party; and (6) compliance by the other party in all material respects with its covenants.

Support Agreement

In connection with execution of the Merger Agreement, the Issuer, CNX Gas Company LLC, and Holdings, entered into a Support Agreement, dated as of July 26, 2020 (the “Support Agreement”), pursuant to which CNX Gas Company LLC and Holdings have agreed to deliver a written consent (the “Written Consent”), covering all of the Common Units beneficially owned by them (the “Covered Units”), approving the Merger, Merger Agreement and any other matters necessary for consummation of the Merger and the other transactions contemplated in the Merger Agreement. The Support Agreement terminates upon the earliest to occur of the termination of the Merger Agreement, the time the Merger becomes effective and the written agreement of the parties to the Support Agreement to terminate the Support Agreement.

The foregoing summaries of the Merger Agreement and the Support Agreement and the transactions contemplated thereby do not purport to be complete and are subject to, and qualified in their entirety by, the full text of such agreements, copies of which are attached hereto and incorporated herein by reference.

General

The Reporting Persons acquired the securities described in this Schedule 13D for investment purposes and they intend to review their investments in the Issuer on a continuing basis. Any actions the Reporting Persons might undertake will be dependent upon the Reporting Persons’ review of numerous factors, including, but not limited to: an ongoing evaluation of the Issuer’s business, financial condition, operations and prospects; price levels of the Issuer’s securities; general market, industry and economic conditions; the relative attractiveness of alternative business and investment opportunities; and other future developments.

The Reporting Persons may, at any time and from time to time, acquire additional securities of the Issuer, or retain or sell all or a portion of the securities then held, in the open market or in privately negotiated transactions. In addition, the Reporting Persons own 100% of the membership interests of CNX Gathering LLC, which owns all of the membership interests in the Issuer’s General Partner and appoints the General Partner’s board of directors. The Reporting Persons may engage in discussions with management, the board of directors, and unitholders of the Issuer and other relevant parties or encourage such persons to consider or explore extraordinary corporate transactions, such as: a merger; sales or acquisitions of assets or businesses; changes to the capitalization or distribution policy of the Issuer; or other material changes to the Issuer’s business or corporate structure, including changes in management or the composition of the board of directors.

Other than as described above, none of the Reporting Persons currently has any plans or proposals that relate to, or would result in, any of the matters listed in Items 4(a)–(j) of Schedule 13D, although, depending on the factors discussed herein, the Reporting Persons may change their purposes or formulate different plans or proposals with r espect thereto at any time.

(a) – (b)

The following sets forth, as of the date of this Statement, the aggregate number of Common Units and percentage of Common Units beneficially owned by each of the Reporting Persons, as well as the number of Common Units as to which each Reporting Person has the sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or to direct the disposition of, as of the date hereof, based on 89,799,224 Common Units outstanding as of July 24, 2020.

CNX Gas Company LLC is the record holder of 46,794,206 Common Units. CNX Gas Company LLC is a wholly owned subsidiary of CNX Gas LLC, which is a wholly owned subsidiary of CNX Resources Corporation, a publicly traded company listed on the New York Stock Exchange.

Holdings is the record holder of 897,992 Common Units. Holdings is a wholly owned subsidiary of CNX Gas Company LLC, which is a wholly owned subsidiary of CNX Gas LLC, which is a wholly owned subsidiary of CNX Resources Corporation, a publicly traded company listed on the New York Stock Exchange.

(c)    Other than as described in Item 3 and Item 4, during the past 60 days none of the Reporting Persons or the Related Persons has effected any transactions in the Common Units.

(d)    None.

(e)    Not applicable.

The information provided or incorporated by reference in Item 4 is hereby incorporated by reference herein.

SIGNATURES

After reasonable 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.

SCHEDULE I

Information regarding each managing member, director and executive officer of the Reporting Persons, or each person controlling the Reporting Persons, is set forth below.

Reporting Person: CNX Resources Corporation