Bain Capital Partners LLC will reduce its holdings in Burlington Stores Inc. to minority status following a secondary public offering of 8 million shares of the off-price retailer’s common stock.
According to a prospectus filed with the Securities and Exchange Commission, 7.95 million of the shares offered will be from Bain, reducing its holdings in the company to about 34.7 million shares, or 46.5 percent of those outstanding.
If completed, this would mark the first time since Bain’s 2006 acquisition of Burlington that it didn’t hold a majority of its shares and Burlington would no longer be considered a “controlled company” according to the corporate governance rules of the New York Stock Exchange.
However, the retailer said it might continue to “rely on exemptions from certain corporate governance requirements during a one-year transition period.”
Burlington is currently exempt from the requirement that a majority of its directors be independent. Three of the six members of its board — Jordan Hitch, Joshua Bekenstein and Tricia Patrick — are affiliated with Bain. The three other directors are Thomas Kingsbury, president and chief executive officer; Paul Sullivan and John Mahoney.
The Burlington, N.J.-based off-price retailer will neither sell any shares in the offering nor receive any of its proceeds. J.P. Morgan is acting as sole bookrunning manager.
Burlington has yet to price the shares. They closed Thursday at $37.65, down 2.6 percent. At that price, Burlington’s proceeds from the offering would be just under $300 million.
Shares have performed well this year, rising 75 percent from their 52-week low of $21.54 set on Dec. 10.
Bain acquired Burlington from the Milstein family for $2.06 billion in 2006 and retained approximately 42.6 million shares, or 57.6 percent of those outstanding, following the company’s initial public offering of about 15.3 million shares, at $17 a share, one year ago. An additional 13.8 million shares were sold in a secondary offering in May.