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Victoria Dumped: L Brands Plunges After Agreeing To Terminate LBO Deal With Sycamore

Courtesy of ZeroHedge View original post here.

Victoria's Secret parent L Brands is plunging after hours after announcing it had reached a mutual agreement with Sycamore Partners to terminate their previously announced going private transaction.

The announcement comes ten days after  Victoria was dumped – for the first time – when Sycamore Partner sued to scrap its deal with L Brands, claiming that the decision by L Brands to close its U.S. stores in March, furlough the majority of its workers and skip April rent payments – as if it had any choice in doing so in an economy that was effectively shut down – were violations of the proposed transaction, according to a lawsuit filed by Sycamore in a Delaware court Wednesday.

As of today, however, the two companies have agreed to settle all pending litigation and agreed to mutually release all claims.

L Brands announced that as part of As part of L Brands’ strategy, the company remains committed to establishing Bath & Body Works as a pure-play public company and is taking the necessary steps to prepare the Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK businesses (collectively, Victoria’s Secret) to operate as a separate, standalone company.

The market, which already knew the LBO was likely not going to happen, was not too happy with the news and sent LBrands stock plunging as much as 16% now that LBrands will somehow have to find a way to remain viable on its own.

From the press release:

L Brands Outlines Go-Forward Strategy

  • Mutual Agreement with Sycamore Partners to Terminate Previously Announced Transaction
  • Remains Committed to Establishing Bath & Body Works as a Pure-Play Public Company; Taking Necessary Steps, Including Implementing Cost Reductions and Performance Improvements, to Prepare Victoria’s Secret Businesses to Operate on a Separate, Standalone Basis
  • Previously Announced Leadership and Governance Changes Effective as of 2020 Annual Meeting of Stockholders

COLUMBUS, Ohio, May 04, 2020 (GLOBE NEWSWIRE) — L Brands, Inc. (NYSE: LB) today announced a mutual agreement with Sycamore Partners to terminate their previously announced transaction and outlined its go-forward strategy for the company to drive long-term shareholder value. As part of L Brands’ strategy, the company remains committed to establishing Bath & Body Works as a pure-play public company and is taking the necessary steps to prepare the Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK businesses (collectively, Victoria’s Secret) to operate as a separate, standalone company. In addition, the company’s previously announced changes to the Board of Directors and leadership will take effect as of L Brands’ 2020 Annual Meeting of Stockholders.

Sarah Nash, current director and future Chair of L Brands’ Board, said, “Like all retailers, the company faces an extremely challenging business environment. Our Board believes that it is in the best interests of the company, our stockholders and our associates to focus our efforts entirely on navigating this environment to address those challenges and positioning our brands for success rather than engaging in costly and distracting litigation to force a partnership with Sycamore. We are implementing significant cost reduction actions and performance improvements at Victoria’s Secret while continuing to drive strong growth at Bath & Body Works. We will continue to make decisions and take actions with the best interests of all our stakeholders and the future of our company in mind.”


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