Birkenstock's biggest shareholder is selling millions of shares, sending them lower

By Bill Peters

Share offering from L Catterton 'is an opportunity for us to further broaden our investor base and to increase the liquidity of our stock,' Birkenstock CEO says

Shares of Birkenstock Holding fell after hours on Monday after the iconic sandal maker said its biggest shareholder would offload some of its investments in the company through a public offering.

That secondary offering, of 14 million shares, is being made by an entity affiliated with L Catterton, a private-equity firm created in part by luxury-brand conglomerate LVMH (FR:MC). The affiliate is BK LC Lux MidCo S.a r.l.

Following the offering, L Catterton will hold 73.2% of Birkenstock's (BIRK) ordinary outstanding shares.

Shares of Birkenstock were down 5% after hours on Monday. However, the stock is up 22.7% so far this year. Shares began trading publicly in October.

"Supported by the positive outlook and strong performance of our business, the intended secondary offering is an opportunity for us to further broaden our investor base and to increase the liquidity of our stock," Birkenstock Chief Executive Oliver Reichert said in a statement.

Birkenstock, when it reported quarterly results in May, raised its full-year sales outlook, following what it said was growing demand for its footwear that had outstripped supply. The company's so-called "closed-toe silhouettes," such as its Boston clogs, have also been popular.

L Catterton has sole voting power over around 9.9 million of the shares being offered. The firm, along with Birkenstock's executives and other employees, have voting power over the rest. L Catterton plans to grant the underwriters a 30-day option to buy up to 2.1 million other shares.

Sales of the shares owned by the executives and employees will be used to pay taxes related to Birkenstock's IPO.

"At L Catterton, we remain deeply committed to Birkenstock and continue to be long-term partners who have deep conviction in the company's growth story," Michael Chu, the co-CEO of L Catterton and Birkenstock's board chair, said. "As a lead investor and the largest shareholder, we are committed to executing this transaction in a responsible way."

Goldman Sachs and J.P. Morgan are the joint lead book-running managers for the proposed offering.

-Bill Peters

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06-24-24 1815ET

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