Chewy's largest shareholder to sell $500 million in shares

Chewy Inc . (NYSE: NYSE:CHWY ), an online retailer of pet products, saw its shares drop by 4.7% following the announcement of a significant public stock offering by its largest shareholder. Buddy Chester Sub LLC, linked to BC Partners, is initiating an underwritten public offering of $500 million worth of Chewy's Class A common stock.

The selling entity plans to give underwriters a 30-day option to acquire an additional $75 million of the stock, potentially increasing the total offering size. Chewy itself will not be selling any shares nor will it receive any proceeds from this offering. The completion of the sale is contingent on market conditions, and there is no certainty as to the timing or completion of the offering.

Concurrently, Chewy has agreed to repurchase $50 million of its Class A common stock from the selling shareholder. This transaction is separate from the company's existing $500 million share repurchase program that was authorized on May 24, 2024. The repurchase was approved by a special committee of Chewy's Board of Directors, which is composed of independent directors not affiliated with BC Partners. The shares acquired in this repurchase will be cancelled and retired.

The repurchase is expected to happen in conjunction with the public offering, although it is contingent upon the offering's closure. The information for this article is based on a press release statement.

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Source: Investing.com