Investor Anger Emerges Over EQT’s $2.7 Billion Broken Promise

(Bloomberg) -- A move by EQT AB’s partners to sell stock worth $2.7 billion a year earlier than stipulated in a lock-up agreement is sowing discontent among the private equity firm’s investor base.

One such stakeholder is Emilie Westholm, the head of responsible ownership at Swedish insurer Folksam Group. “If a lock-up is broken prematurely, it should be justified clearly and with relevant information,” she told business daily Dagens Industri.

Instead, Westholm says she finds herself “in a situation where there is speculation that it’s only about profit taking from those who have been covered by the lock-up.”

The sale of 63.1 million shares could hurt confidence in the stock, according to the Swedish Shareholders’ Association. “There are companies that have significantly worse liquidity,” the association’s legal counsel, Sverre Linton, said. “It sounds like a pretext.” 

EQT’s founder and chairperson Conni Jonsson said on Tuesday that the decision would “further strengthen the ownership base and incrementally improve stock liquidity.” The firm’s share price was trading 17 kronor above the secondary offer level of 370 kronor at 10:30 a.m. Stockholm time.

Read More: EQT Partners Get $2.7 Billion Payday With Early Share Sale

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