End of quarterly earnings ushers in secondary sales
With the second-quarter earnings season winding down, US corporations and financial sponsors turned their attention to cashing out existing stock holdings.
Led by a US$1bn secondary block by AIG in Corebridge Financial, there were six registered selldowns last week in the US totalling US$1.8bn, five of which were backstopped by banks, according to IFR data.
In the case of Corebridge, Morgan Stanley offloaded its purchase of 30m Corebridge shares overnight on Wednesday at US$33.65, towards the lower end of the US$33.55–$34.23 marketing range and a 1.7% discount to the US$34.23 last sale.
The bank paid US$33.51 per share on the block purchase, netting it a US$4.2m profit (on a US$1bn commitment) assuming full distribution, securities records show.
Yet Corebridge shares fell by 3% post-pricing on Thursday to US$33.20.
Since taking the life insurance unit public in late 2022, AIG has now reduced its Corebridge stake to 15.6% through a combination of five secondary sales and by selling a 21.6% stake to Nippon Life Insurance for US$3.8bn in December.
The most recent of those public offerings was a block sale of 30m shares at US$31.20 in November last year that was led jointly by JP Morgan and Morgan Stanley – while a bit off-clock, the latest selldown was inevitable on the way to a full cash out by AIG.,
AIG is free to sell again in 30 days.
Blackstone, which purchased its current 11.5% stake in Corebridge ahead of the 2022 IPO, is restricted from selling until 2027.
In another expected move, Advent International pared its stake in fast-casual diner First Watch Restaurant to 15.9% from 24.1% via a US$89.5m block sale overnight on Wednesday.
Barclays and Goldman Sachs offloaded their joint purchase of 5m shares at US$17.90, the bottom the US$17.90–$18.40 marketing range and a 4.9% discount to the US$18.83 last sale.
The fast-casual diner operator's shares closed Thursday trading at US$17.79.
This is Advent’s sixth selldown since taking First Watch public in 2021, the most recent being a block sale of 8m shares at US$19.95 that netted purchaser Goldman Sachs US$1.5m.
Less predictably, GPC Capital Partners reduced its stake in Bowhead Specialty via a US$61.6m block sale led by RBC Capital Markets, also overnight on Wednesday. The selldown is only the second since the speciality insurer’s IPO at US$17 in May 2024, the other being a marketed secondary sale at US$29 in October 2024.
RBC placed its purchase of 2m Bowhead shares at US$30.80, the bottom of the US$30.80–$32.18 marketing range and a 4.3% discount to the US$32.18 last sale.
Even less predictably, speciality car insurer Hagerty helped facilitate a circa US$90.6m secondary sale of stock on behalf of the estate of former CEO Kim Hagerty.
Keefe Bruyette & Woods and JP Morgan benefitted from marketing the Hagerty selldown for one day publicly. The banks were able to upsize the offering to 9.7m shares, from 8.7m shares, priced late on Thursday at US$9.34, a 14.5% file-to-offer discount.
The selldown represented more than 100 days’ trading volume.
Shares of Hagerty, which specialises in insuring collectible automobiles, rebounded on Friday to US$10.49.