AUS
NZ
UK
CA
USA
IND
Highlights
- Authentic Brands Group said on Monday, November 21, that it is selling equity stakes in its enterprise to CVC Capital and HPS Investment Partners.
- It had announced its plans to launch an initial public offering (IPO) earlier this year.
- The retail conglomerate is known to own brands like Aeropostale, Forever 21 and Sports Illustrated.
Authentic Brands Group, which had announced its plans to launch an initial public offering (IPO) earlier this year, said on Monday, November 21, that it will now be raising capital by selling equity stakes in its business.
The retail conglomerate, known to own brands like Aeropostale, Forever 21 and Sports Illustrated, had said in July 2021 that it has submitted its documents for an IPO in the US.
However, its latest release indicated that the company is shelving its IPO plans and is now set to sell “significant equity stakes” to private equity player CVC Capital and investment firm HPS Investment Partners and.
Also read: Definity secures one of Canada’s largest IPOs: Is DFY stock a buy?
What was Authentic Brands Group’s IPO plans?
When it filed for an IPO in July, Authentic Brands said that it was seeking for a listing on the New York Stock Exchange (NYSE) under the ticker of ‘AUTH’.
Its regulatory filing also listed big names such as investment management giant BlackRock Inc, private equity player General Atlantic and real estate enterprise Simon Property Group as its shareholders.
Its IPO, on the other hand, was set to headed by financial services players BofA Securities, JP Morgan and Goldman Sachs.
Also read: Chobani IPO: When & where to buy CHO stock?
Authentic Brands’ equity stake sale
The stake sale transaction, Authentic Brands noted in its statement, is expected to be complete in December this year, following which CVC Capital and HPS Investment are set to each get a seat on its board of directors.
However, BlackRock will continue to be the retail giant’s biggest shareholder after this transaction, while its other investors like Simon Property, General Atlantic, basketball star Shaquille O’Neal, etc will also keep their stakes.
Why is Authentic Brands shelving its IPO? How to buy its stock now?
As the COVID-19 outbreak pumped up the demand for online businesses, investors too showed increased support for companies with a strong internet presence.
This popularity can be noted in recent IPOs as well, as some online players were seen raking in significant valuations as they went public.
Authentic Brands, however, was reportedly looking at a valuation of about US$ 10 billion in its IPO in July. Its latest stake sale transaction, on the other hand, is bringing its enterprise value at about US$ 12.7 billion.
While this could be one reason as to why the brand management firm is choosing to shelve its IPO at the moment, some reports note that it could seek a listing again in a couple of years.
If that happens, investors interested in Authentic Brands can explore its stocks. Till then, one may have to wait to get a piece of this retail giant.
