Black Opts Out Of Apollo Stock Sale; Oaktree Founders To Sell Shares: UPDATED

  • Leon Black absent from May 10 share registration by insiders
  • Apollo co-founders Marc Rowan, Joshua Harris set stock sales
  • Oaktree Capital founders may raise up to $80 mln each in unit sale

With none of his shares included in the $528 million Apollo Global Management sale registration of 21.1 million Class A shares at an offering price of $25 each, Black continues to own 92.7 million shares, more than any other executive at the firm, according to a May 10 prospectus filed with the Securities and Exchange Commission.

Apollo shares recently traded at $26.89 each on the New York Stock Exchange. The stock’s 52-week high is $28.14 a share and its 52-week low is $10.42. Apollo Global Management’s stock debuted at $19 a share in its initial public offering on March 30, 2011, after Kohlberg Kravis Roberts & Co LP debuted in 2010 and Blackstone Group LP launched its IPO in 2007.

Widely quoted last month in his appearance at a panel at the Milken Institute Global Conference in Los Angeles, Black said Apollo Global Management has unloaded about $13 billion in assets in the prior 15 months. “We think it’s a fabulous environment to be selling,” he said. “We’re selling everything that’s not nailed down. And if we’re not selling, we’re refinancing.” He added the financing market appears to be back at levels comparable to 2007.

Meanwhile, Apollo Global Management managing partners and co-founders Marc Rowan registered to sell 3.9 million Class A shares and Joshua Harris slated 1.9 million shares for sale in the two largest transactions by insiders listed in the May 10 filing. The sales would generate gross proceeds of about $98 million for Rowan and $48 million for Harris based on the offering price of $25 per share.

After the sale, Rowan would own 54.6 million shares of Apollo Global Management, assuming full exercise of options to purchase additional Class A shares, while Harris would retain 56.8 million shares.

The California Public Employees’ Retirement System and an entity managed by the Abu Dhabi Investment Authority each registered to sell 6.5 million shares in the offering for gross proceeds of $162.5 million each. The two institutional shareholders continue to hold 22.5 million shares.

The registration of shares came after the March expiration of a two-year lock-up on Apollo’s partners for selling up to 7.5 percent of their equity. A lock-up on 15 percent of the equity of Apollo expires in March 2014.

At Oaktree, chairman Howard Marks and president Bruce Karsh would each cut their stake from 14.4 percent to a minimum of 13.4 percent as part of a secondary offering with total potential net proceeds of $367.6 million, according to a May 20 regulatory filing. The offering could raise between $69.5 million and $79.9 million for the two executives, depending on whether the underwriters fully exercise their option to purchase shares in the offering,

Marks, 67, and Karsh, 57, founded Oaktree in 1995. The firm now ranks as the largest distressed debt investor in the world.

The stock sale comes about 13 months after Oaktree’s initial public offering at a price of $43 per unit. The price of units has since climbed to about $53. Marks and Karsh each sold $72.5 million in stock in the firm’s IPO in April 2012. Marks and Karsh were worth $1.7 billion each as of March 2013, according to Forbes.

Steve Gelsi is a senior editor of Buyouts; Greg Roumeliotis is a correspondent for sister news service Reuters

(Update: This story has been updated with information about the planned stock sale of two Oaktree founders)