BYRON CENTER — Shares in SpartanNash Co. soared today following a filing to federal securities regulators about a “commercial agreement” with e-commerce giant Amazon.com Inc.
The filing to the U.S. Securities and Exchange Commission outlined terms of stock warrants under which NV Investment Holdings LLC, a subsidiary of Amazon, could acquire up to 5.4 million shares of SpartanNash common shares, or 15.7 percent of outstanding shares.
Amazon has a right to purchase SpartanNash shares through the stock warrants at a price of more than $17.72 per share until Oct. 7, 2027, according to the SEC filing.
If Amazon (Nasdaq: AMZN) purchases all of the shares it can, the company would become the largest shareholder in the Byron Center-based SpartanNash (Nasdaq: SPTN) with a 12.5 percent stake in the corporation, CFO Mark Shamber told MiBiz. The filing sent SpartanNash shares up 26 percent by late afternoon, with trading at more than 15 times the normal daily volume.
Previously, SpartanNash launched a distribution partnership with Amazon in 2016 that allowed the grocery retailer and distributor to sell products via Amazon Prime.
The new deal builds on the 2016 agreement, Shamber said. He believes it’s the first time SpartanNash has used stock warrants in a business agreement with a client.
“We continue our relationship with a long-term customer and look to, hopefully, grow that business with them,” he said. “There were a variety of discussions and both parties thought this would work. When we had our internal discussions and talked about our various stakeholders, we thought this would be, in the manner in which (stock warrants) were earned, this would yield a positive benefit for our stakeholders.”
The grocery wholesaler and retailer, which recorded more than $8.5 billion in sales in 2019, last month announced the hiring of a new CEO, Tony Sarsam, as MiBiz previously reported. Dollar General is SpartanNash’s largest customer, accounting for about 17 percent of sales in 2019.
EDITOR’S NOTE: This story has been updated with comment from SpartanNash CFO Mark Shamber.