Form 4: Apollo Global Management Executive Enters Forward Sale Agreement for Up to 1 Million Shares

Joshua Harris, through affiliated entities, entered into a forward sale agreement involving up to 1,000,000 shares of Apollo Global Management common stock.

Summary

• On May 16, 2024, MJH Partners III LLC, a subsidiary of MJH Partners II LLC, entered into a delayed draw variable share forward sale transaction with an unaffiliated bank.
• The agreement relates to up to 1,000,000 shares of Apollo Global Management common stock.
• MJHP III is obligated to deliver up to 1,000,000 shares of common stock (or cash equivalent) to settle the agreement.
• MJHP III pledged 1,000,000 shares of common stock to secure its obligations under the agreement but retains voting and ordinary dividend rights.
• The number of shares to be delivered depends on the Settlement Price relative to the Floor Price and Cap Price, with different formulas applying based on whether a prepayment has been received.
• Joshua Harris exercises voting and investment control over MJHP II and MJHP III.
• The reporting persons disclaim beneficial ownership of the reported securities except to the extent of his or its pecuniary interest therein.

Sentiment

Score: 5

Explanation: The document describes a financial transaction by an executive. It is neither overtly positive nor negative, but rather a factual disclosure. The sentiment is neutral.

Risks

• The value received from the forward sale agreement is dependent on the future stock price of Apollo Global Management.
• The structure of the agreement is complex and involves multiple variables (Settlement Price, Floor Price, Cap Price) that could impact the final outcome.
• The need to deliver shares or cash to settle the agreement could create a future liquidity need for MJHP III.

Future Outlook

The agreement involves future settlement dates and potential prepayments, with the final number of shares or cash to be delivered determined by the stock price at those future dates.

Management Comments

• Each of the Reporting Persons disclaims beneficial ownership of the reported securities except to the extent of his or its pecuniary interest therein.
• This report shall not be deemed an admission that the Reporting Persons are a member of a group or the beneficial owner of any securities not directly owned by the applicable Reporting Person.

Industry Context

Forward sale agreements are often used by executives and major shareholders to monetize their holdings while deferring capital gains taxes and maintaining some potential upside in the stock.

Comparison to Industry Standards

• Forward sale agreements are a relatively common tool used by corporate insiders to manage their personal finances and diversify their holdings.
• The specific terms of this agreement (Floor Price, Cap Price, settlement mechanism) are typical of these types of transactions, but the exact details are negotiated on a case-by-case basis.
• Similar transactions have been undertaken by executives at companies like Blackstone and KKR.

Stakeholder Impact

• The transaction could have a minor impact on shareholders if the shares are ultimately sold into the market, potentially diluting existing holdings.
• The agreement does not appear to directly impact employees, customers, suppliers, or creditors.

Key Dates