Chewy Inc. (CHWY) announced on Wednesday that it has entered into an agreement to repurchase approximately 17.55 million shares of its Class A common stock, each with a par value of $0.01, at a price of $28.49 per share. This repurchase price signifies a 5% discount to the previous day's closing price, culminating in a total repurchase value of roughly $500 million. The transaction involves Buddy Chester Sub LLC, an entity linked to funds managed by BC Partners Advisors LP, Chewy's largest shareholder.
Chewy has expressed that the repurchase is a prudent allocation of capital, effectively allowing the company to buy back shares below the current market price, while concurrently diminishing the ownership stake of its largest shareholder.
Before this repurchase, Chewy had approximately 436 million shares of Class A and Class B common stock in circulation. Post-repurchase, the total number of outstanding shares will be reduced to about 418 million. The repurchase transaction is anticipated to be finalized by June 27, 2024.
