Abu Dhabi’s sovereign investor Mubadala Investment Co. raised $1.91 billion from a block sale of GlobalFoundries Inc. shares on Tuesday, according to people familiar with the transaction.
The placement consisted of 22 million shares offered at a price range of $86.30 to $86.80 each. The deal was worked on by Morgan Stanley, and was marketed at up to a 4.1% discount to Tuesday’s closing price of $89.96.
The share sale arrangement includes a 60-day agreement that restricts Mubadala from making additional sales during that period. Following the transaction, Mubadala reduced its ownership to 400 million shares, representing 73% of GlobalFoundries, the fund said in a statement late Tuesday.
In the statement, Camilla Languille, co-chief executive officer of private equity at Mubadala, said the sovereign investor remains highly committed to GlobalFoundries’ strategic direction.
Market reaction was immediate: GlobalFoundries shares declined in pre-market trading, falling 7.6% to $83.15 each on Wednesday morning.
Details of the offering
The transaction was executed as a block trade, with the shares sold in a single placement. The per-share pricing band of $86.30 to $86.80, as reported by people familiar with the matter, implied a discount relative to the previous session’s close of $89.96.
The offering included a 60-day restriction on follow-on sales, limiting Mubadala’s ability to reduce its remaining equity stake in the short term.
Ownership and statement
After disposing of the 22 million shares, Mubadala’s holding in GlobalFoundries stands at 400 million shares, or roughly 73% of the company. In its late Tuesday statement the fund reiterated its continued commitment to the chip maker’s strategic course, as expressed by Camilla Languille.
Market impact
Shares of GlobalFoundries moved lower in early trading, registering a 7.6% decline to $83.15 in pre-market quotes on Wednesday. The price movement followed the announcement of the block sale and the reported pricing range.
This report confines itself to the facts provided in the transaction announcement and market quotes; it does not expand beyond those details.