Shares of Box (NYSE: BOX) dropped as much as 13% today after the company announced a strategic partnership and investment from KKR (NYSE: KKR). The news comes a few weeks after reports suggested that activist investor Starboard Value was pushing for the company to sell itself, and investors seem disappointed that a sale is now likely off the table for the time being. As of 11:15 a.m. EST on Thursday, the stock was still down 9%.
KKR has agreed to lead a $500 million investment in Box, which will come in the form of convertible preferred stock. Box said it plans to use “substantially all” of the proceeds to fund a share repurchase program that will be conducted as a Dutch auction, in which the auctioneer begins with a high asking price and lowers it until some participant accepts the price, or it reaches a predetermined reserve price. Shareholders will self-tender their shares.