What happened
Pest control specialist Rollins(NYSE: ROL) was not having a good week on the stock market. According to data compiled by S&P Global Market Intelligence, as of early Friday morning the company's share price had weakened by over 9% week to date. The announcement of a share sale was a key reason for the decline.
So what
On Wednesday, Rollins revealed that its top institutional shareholder, LOR, would be divesting $1.35 billion worth of the company's common stock in a public offering. The following day, it said the issue's price would be $35 per share, which was well lower than the nearly $40 level the stock traded for at the beginning of the week.
The offering's underwriters, led by Goldman Sachs and Morgan Stanley, have been granted a 30-day option to buy up to a combined $202.5 million worth of additional stock.
Following the issue, Rollins said it intends to buy back roughly $300 million worth of the shares.
Rollins stressed that, as it is not the selling shareholder, it will receive no proceeds from the sale. It anticipates that the offering will close on Monday, Sept. 11.
Now what
The entity that will, LOR -- the company's ticker symbol spelled backwards -- is affiliated with Rollins. The latter's chairman of the board, Gary Rollins, is an officer and director of LOR. Previously he served as the CEO of his namesake company for over 20 years, stepping down in late 2022. He is the son of one of its co-founders.
According to the share sale's prospectus, LOR currently holds just under 44% of Rollins. Following the sale, that figure will drop to slightly more than 37%.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group and Rollins. The Motley Fool has a disclosure policy.
