Chewy's Largest Shareholder to Sell $500 Million in Stock

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

The selling party plans to grant underwriters a 30-day option to purchase an additional $75 million worth of shares, which could potentially increase the total offering size. Chewy itself will not sell any shares and will not receive any proceeds from this offering. The completion of the sale is subject to market conditions, and there is no certainty regarding the timing or completion of the offering.

At the same time, Chewy has agreed to repurchase $50 million worth of Class A common stock from the selling shareholder. This transaction is separate from the company's currently authorized $500 million share repurchase program, which was established on May 24, 2024. The buyback has been approved by a special committee of the Board of Directors comprised of independent directors not affiliated with BC Partners. The shares acquired in this buyback will be canceled and retired.

The buyback is expected to occur concurrently with the offering, but is dependent on the closing of the offering. The information in this article is based on a press release statement.