Birkenstock's Biggest Shareholder is Selling Millions of Shares, Sending Shares Lower

Shares of Birkenstock Holding declined in after-hours trading on Monday following the announcement that its largest shareholder plans to sell a portion of its stake in the company through a public offering.

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This secondary offering, involving 14 million shares, is being made by an entity associated with L Catterton, a private-equity firm partially created by luxury brand conglomerate LVMH. The affiliate responsible for this sale is BK LC Lux MidCo S.a r.l.

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Post-offering, L Catterton will still hold 73.2% of Birkenstock's ordinary outstanding shares. Despite the announcement, shares of Birkenstock fell 5% after hours on Monday, though they have risen 22.7% this year since the stock began trading publicly in October.

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Birkenstock Chief Executive Oliver Reichert stated that the secondary offering is a strategic move to broaden their investor base and increase stock liquidity, supported by the positive outlook and strong performance of the business.

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In its May quarterly results, Birkenstock raised its full-year sales forecast due to increasing demand for its footwear, which has surpassed supply. Their "closed-toe silhouettes," such as the Boston clogs, have also been particularly popular.

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L Catterton has sole voting power over approximately 9.9 million of the shares being offered. The firm, along with Birkenstock executives and employees, controls the voting power over the remaining shares. L Catterton also plans to provide the underwriters with a 30-day option to purchase up to 2.1 million additional shares.

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Proceeds from the sales of shares owned by Birkenstock executives and employees will be used to cover taxes related to the company’s IPO.

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Michael Chu, the co-CEO of L Catterton and Birkenstock’s board chair, reaffirmed their commitment to Birkenstock, expressing confidence in the company's growth potential. He emphasized that as a lead investor and the largest shareholder, L Catterton is dedicated to executing the transaction responsibly.

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

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