FBR Capital Comments On Lampert's AutoZone (AZO) Sales

June 24, 2009 10:01 AM EDT

FBR Capital commented on the sale of AutoZone (NYSE: AZO) stock by its largest holder Eddie Lampert, saying its supports their Underperform rating.

FBR notes SEC filings showed Lampert and his ESL Investment hedge fund sold 454K shares and distributed to partners an additional 2.578M shares. The firm notes the last time he or his affiliated companies sold stock was 12/31/06 (19,000 shares) and 12/31/03 (5.6M shares). FBR notes this brings the Eddie Lampert/ESL beneficially owned position down from 23.370M shares (43.5% of the outstanding shares prior to the sale) down to 20.956M shares (39% of the outstanding shares).

FBR also notes that On 6/26/08, ESL signed an agreement by which his voting power caps at 37.5% of the outstanding shares (the reason for this was because AZO repurchases a material amount of stock, so AZO didn't want Eddie's stake to reach a majority of the company simply by default and the sheer math of self-induced share repurchases completed by them).

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Related Entities

• Edward Lampert
• RBS Partners
• ESL Investments
• Hedge Funds
• Stock Buyback

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