Barclays was the bookrunner on the £102m placing, which was launched after the market close on Monday evening. Rothschild was financial adviser to Apollo.
Due to the strength of the demand, the size of the deal was increased from 27.5m shares to 33m, equivalent to a 13.8% stake.
“The long-only support was exceedingly strong,” said a source close to the transaction. “We did a small wall-crossing exercise and managed to increase the size of the deal during book building. It was a mix of new and existing holders, which was good to see.”
At the 310p offer price, the transaction was priced at a 7.2% discount to the closing price of the stock on Monday evening.
There were around 40 lines in the book, and the top 10 investors took 85% of the shares, the source close to the transaction said.
Apollo was left with a 28.3% stake following the sale. It is subject to a 90 day lock-up on its remaining shares.
It is the second time that the private equity group has sold the stock since its £242m flotation in May 2019. The first block trade was in January when it sold a 12.5% stake for £118.8m.
Watches of Switzerland is the largest retailer of luxury watches in the UK and the country’s biggest dealer of Rolex watches. Its business includes several duty free concessions at major airports, including Heathrow.
It also operates a concession in Wynn Las Vegas, a luxury resort and casino on the city’s famous strip.
Following its IPO, Watches of Switzerland traded strongly in the aftermarket, reaching a high of around 390p at the start of this year.
The onset of the global Covid-19 pandemic in March and the global equity market crash it sparked hit the company’s share price hard. The lockdown in the UK also forced the closure of its shops.
Shares in Watches of Switzerland are down more than 19% this year, giving the company a market capitalisation of £751m.
Yet, despite the disruption caused by Covid-19, Watches of Switzerland still posted record earnings in its 2020 financial year, which ended at the end of April.
Group revenues rose 5.9% to £819.3m, while the company made adjusted Ebitda of £78.1m, up 13.6% from the previous year.
“It is still quite an illiquid stock but there is a lot of interest in the buy-side,” said the source close to the deal. “You can see that from the spike in the stock following their results.”
Using the proceeds from its IPO, Watches of Switzerland also reduced its debt from £240m at the end of April 2019 to £129.7m by the end of April this year.