American companies and their lenders are grabbing windows to sell shares

NEW YORK, March 7 (Reuters) – Selling of shares in publicly traded US companies had their strongest performance in more than a year last week, as companies and some of their shareholders, such as private equity firms, took advantage of the equity market’s risk appetite investors.

Share sales reached $4.97 billion in the United States last week, the highest number since the second week in 2022, according to data provider Dealogic. Global stock sales totaled $12.3 billion, the highest in more than 30 weeks.

Investment bankers and lawyers say companies are seeing strong demand for their stock from investors who believe now is the time to place big bets on the market recovering in the wake of the Federal Reserve raising interest rates to curb inflation. to fight. It’s a risky proposition, so companies and their lenders jump at the chance for fear it will quickly slip away.

“Equity markets have regained some momentum and volatility has eased, boosting buying appetite,” said Santiago Gilfond, co-head of US equity capital markets at Credit Suisse Group AG (CSGN.S). He added that stock sellers have moderated their valuation expectations, luring buyers.

Last week saw 18 so-called secondary stock sales in the US, including a $1.7 billion divestment by utility company American Water Works Co Inc (AWK.N), the fifth-largest US stock sale since early 2022.

In another notable transaction last week, Oreo cookie maker Mondelez International Inc (MDLZ.O) sold approximately a $1 billion stake in beverage maker Keurig Dr Pepper Inc (KDP.O) in an unregistered stock sale, according to a deposit securities.

Private equity firms get a piece of the action. Blackstone Inc (BX.N) sold a roughly $270 million stake in dating app Bumble Inc (BMBL.O) last week, along with a roughly $220 million position in HR platform Alight Inc (ALIT.N) , and this week, Providence Equity Partners sold a $333 million stake in software vendor DoubleVerify Holdings Inc (DV.N).

The increase in activity has been welcomed by bankers and lawyers working on these offerings. Collectively, they conducted $72.5 billion in stock sales for publicly traded companies in 2022, the lowest level since 1996 and a 67% decline from the 2021 deal bonanza, according to data from Dealogic.

“Investors are willing to put money to work in a way they weren’t a year ago,” said Michael Kaplan, a capital markets partner at law firm Davis Polk.

The next frontier for equity capital markets, bankers and lawyers say, is initial public offerings (IPOs), which have been subdued since Russia’s February 2022 invasion of Ukraine. , and several months to prepare, so companies may not be as nimble to pursue them when the market becomes welcome.

A busy week for IPOs in early February offered some hope for stock market hopefuls, but advisers remain cautious as stocks sold off in recent weeks.

Reporting by Echo Wang and Lance Tapper in New York; Edited by Chizu Nomiyama

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