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Investing.com -- Chewy Inc (NYSE:CHWY) stock fell 4% after the pet products retailer announced that its largest shareholder would sell $1 billion worth of Class A common stock in a public offering.
The selling stockholder, Buddy Chester Sub LLC, an entity affiliated with funds advised by BC Partners PE, LP, also intends to grant underwriters a 30-day option to purchase up to an additional $150 million of shares. Chewy will not receive any proceeds from the sale as it is not selling any shares in the offering.
Separately, Chewy has agreed to purchase $100 million of Class A common stock from the selling stockholder at the same price per share that underwriters will pay in the offering. The repurchased shares will be cancelled and retired upon completion of the transaction, which was approved by a special committee of Chewy’s Board of Directors consisting of independent directors not affiliated with BC Partners.
The company noted that this repurchase is separate from its existing $500 million share repurchase program authorized on May 24, 2024, which remains unaffected by this transaction. While the offering is not conditioned upon the closing of the concurrent repurchase, the repurchase is contingent on the offering’s completion.
BC Partners remains Chewy’s largest shareholder. The offering is subject to market and other conditions, with no guarantee regarding its completion timeline.
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