Antara Capital has been steadily selling off its stake in AMC Preferred Equity Units (NYSE:APE). On May 2 and 3, the event-driven opportunities firm reported selling 2.21 million shares worth $3.35 million. About two weeks later, Antara disclosed selling another 1.23 million shares of APE stock at average prices between $1.60 and $1.63 on May 15.
Now, a new Form 4 filing has come to light that shows Antara’s largest sale this month. On May 16 and 17, Antara disposed of 5.01 million shares at prices between $1.58 and $1.65. However, 4.08 million of those shares were transferred due to the following:
“…ordinary course rebalancing transactions that resulted in a transfer of AMC Preferred Equity Units to Corbin ERISA Opportunity Fund Ltd. (“Corbin ERISA Fund”) and Corbin Opportunity Fund LP (“Corbin Opportunity Fund”). In connection with such rebalancing, the following transactions were consummated: (a) Corbin ERISA Fund purchased 3,080,599 AMC Preferred Equity Units and (b) Corbin Opportunity Fund purchased 1,007,324 AMC Preferred Equity Units.”
Antara Capital Keeps Selling AMC’s APE Stock
These sales shouldn’t be a massive shock to shareholders, as AMC Entertainment (NYSE:AMC) previously filed a prospectus supplement for the resale of up to 232.43 million shares. Antara Capital is listed as the only entity in the “Selling Stockholders” section of the supplement. After the completion of the resale, Antara will own zero shares of APE. As of March 8, Antara had beneficially owned 232.43 million shares.
So, how exactly did Antara receive these shares? The answer to that question is past financing agreements. For example, AMC issued 106.59 million APE units to Antara on Feb. 7 for $75.1 million. AMC also agreed to purchase from Antara $100 million of AMC’s second lien notes due in 2026. In exchange, Antara would purchase 91.03 million APE units.
In a previous piece, I noted that “AMC would benefit by buying back notes and receiving capital, while Antara would receive APE units that it could turn around and sell.” Before this agreement, Antara had purchased 60 million APE units through AMC’s at-the-market program.
Now, it’s very apparent that Antara is reducing its position after completing its previous agreements. The firm is likely slowly selling off its stake in order to cause the least amount of market disruption to APE as possible.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.