The Pushpay Holdings Ltd (ASX: PPH) share price will be on watch today after it revealed that a major shareholder will be selling down its stake.
What did Pushpay announce?
This morning Pushpay announced that shareholders associated with the Huljich family have entered into a block trade agreement with J.P. Morgan and UBS New Zealand to sell 25% of their shares in the donor management system provider.
According to a separate notice, the sellers agreed a price of at least NZ$8.60 per share for the 14,406,494 shares, which represents a total sale price of ~NZ$123.9 million.
This represents a 7% discount to the last close price of Pushpay’s New Zealand listed shares.
Despite the sizeable sale of shares, the Huljich family is expected to remain the largest shareholder of Pushpay with a combined relevant interest in 43.2 million shares.
Pushpay also revealed that the Huljich family remains strongly committed to Pushpay. Peter Huljich will remain on the Pushpay board, with Christopher Huljich continuing to act as his Alternate Director.
Peter Huljich commented: “The outlook for Pushpay remains positive. We look forward to continuing to support the Company as it seeks to deliver upon its strategy of becoming the preferred provider of mission-critical software to the US faith sector.”
“The Huljich family confirms that it does not have any current intention to sell further shares in Pushpay and has provided an undertaking to the Underwriters not to sell further shares in Pushpay until after Pushpay’s FY21 Interim Results are announced on the NZX and ASX,” he concluded.
What now?
News like this doesn’t often go down well with the market and I wouldn’t be surprised to see the Pushpay share price drop lower today. In fact, in early trade in New Zealand the company’s shares are down over 6%.
However, I feel this could be an overreaction. Given how the Huljich family still has a substantial stake in the company, their interests are still firmly aligned with shareholders.
And given Pushpay’s extremely bright long term outlook, any notable share price weakness could arguably be a buying opportunity for investors.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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