Walmart buying what Waltons are selling

BENTONVILLE, Ark. — Walmart’s share price will be under pressure in the coming years as a holding company created decades ago by the Walton family to control their ownership of the company prepares to unload as much as 6% of Walmart’s outstanding shares.

 

The family’s intentions to potentially sell roughly 190 million shares valued at more than $15 billion based on an $80 share price was revealed recently in advance of the company filing its annual proxy statement which is expected to show the percentage of common stock owned by Walton Enterprises, LLC has risen to approximately 50%. The huge ownership position is due in part to the fact that Walmart has spent much of the past decade returning cash to shareholders in the form of dividend payments and stock repurchase activity.

 

During the past three years, Walmart spent roughly $15.3 billion to buy back more than 200 million shares. As the company spent billions buying back hundreds of millions of shares it had the effect of increasing the Walton family’s ownership position.

 

“Given the prospect that Walmart may continue to buy back shares, the Walton family has informed Walmart that it currently expects to sell Walmart shares from time to time in order to help offset possible further increases in its ownership percentage and to help fund charitable contributions,” according to a statement from Walton Enterprises LLC posted on Walmart’s Web site. “The family believes that this is consistent with an appropriate balance of family and non-family ownership that supports the goals of all Walmart shareholders and long term business success.”

 

To facilitate the stock sale, the Walton family informed Walmart of a plan to distribute approximately 6% of Walmart’s outstanding shares to a newly formed entity called the Walton Family Holdings Trust. Unleashing that volume of stock on the open market would create tremendous selling pressure, however the Walton family said it has no set timetable for the sale of shares and anticipated the sales could, “take place over a period of years.”