Members of the Walton family sold 1.45 million shares of Wal-Mart Stores Inc. stock from a trust established to trim the family's ownership stake and fund its charitable interests.
The stock sale took place in three separate transactions over a two-day period this week, according to filings with the U.S. Securities and Exchange Commission. The transactions netted about $103.5 million for members of the Walton Family Holdings Trust, which includes Wal-Mart founder Sam Walton's children Jim, Alice and Rob Walton.
In addition, the SEC filing indicates that Rob Walton made a charitable gift of 940,000 shares of stock from his personal holdings. The filing did not provide any specific details regarding the gift.
The trust was established last year by Walton Enterprises LLC to help offset potential increases beyond the 50 percent ownership level the family tries to maintain. The increase in ownership was the result of Wal-Mart's stock repurchase programs the past few years, according to the company.
Brian Yarbrough, a retail analyst with Edward Jones, said Wal-Mart has taken a more aggressive approach to buying back stock. Wal-Mart authorized a $20 billion buyback program in October 2015, replacing a $15 billion program approved in 2013. About $14.7 billion remained as part of the current buyback program as of April 30, according to a quarterly report filed last month.
Companies use buyback programs to increase earnings per share without increasing revenue. The programs are viewed by companies as a method of returning value to shareholders. But Yarbrough said buying back stock leaves fewer available Wal-Mart shares, increasing the family's ownership stake.
"If they want to stay around 50 percent, and if Wal-Mart continues to be pretty aggressive on buybacks, they'll have to sell some themselves," Yarbrough said.
The Walton family contributed 194 million shares -- or about 6 percent of Wal-Mart's outstanding shares -- to the Walton Family Holdings Trust in April 2015 and planned to sell some of the stock over a period of time. It also would use the shares to fund the family's charitable contributions.
At the time, Wal-Mart issued a statement saying the family believed that the move was "consistent with an appropriate balance of family and non-family ownership that supports the goals of all Walmart shareholders and long term business success."
Wal-Mart spokesman Randy Hargrove said Friday that a timetable for selling shares from the trust has not been specified but could take place over a period of years.
"What you're seeing with the sale of stock is part of that," Hargrove said. "Given the prospect that Wal-Mart may continue to buy back shares, the family informed us it currently expects to sell Wal-Mart shares from time to time through the Walton Family Holdings Trust."
Shares of Wal-Mart stock closed trading Friday at $72.81.
There are 173.1 million shares valued at about $12.6 billion remaining in the family's trust after this week's transactions, according to the SEC filing.
Walton Enterprises LLC owns about 1.42 billion shares of Wal-Mart stock, valued at about $103 billion.
Earlier this week, Forbes rated the Waltons as the wealthiest family in the United States for the third consecutive year. The publication said the seven Walton heirs own an estimated fortune of $130 billion.
Business on 07/02/2016
Print Headline: Waltons' trust sells stock for $103.5M