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Update 22:50: Add Bath & Body Works comment.
Bath and body work (NYSE:BBWI) rose 3% after The Third Point activist fund said it planned to launch a proxy fight against soap and fragrance. company run by alleged excessive executive salaries and lagging financial performance.
Dan Loeb’s Third Point plans to nominate candidates for the company’s annual meeting this spring, according to a letter he sent to the board Wednesday,
Third Point first disclosed that it had a 6% stake in the company in December, saying in a filing filed at the time that the board “made mistakes in structuring its executive compensation.” Third Point, which said it is one of Bath & Body’s top 5 holders, has had some talks with the company’s CEO Gina Boswell and board chair Sarah Nash, though those talks have stalled.
“Unfortunately, our discussions have stalled and our concerns about the way this Board operates have intensified,” Loeb wrote in a letter. “We believe it is imperative that a shareholder representative be added to provide the necessary oversight and we have made it clear to the Company that failure to do so would leave us no choice but to pursue a proxy contest.”
Bath & Body Works (BBWI) announced Tuesday that it has inducted Hershey’s CFO Steven E. Voskuil as an independent board member and last Tuesday inducted current Conagra executive Lucy Brady as a new independent board member. board. With the additions of the new directors, BBWI’s board now has 12 directors, 11 of whom the company classifies as independent.
“While we acknowledge Mr. Voskuil’s financial expertise, this Board’s hand-picked new director does not allay our concerns about material corporate governance deficiencies,” Loeb added in the letter.
Bath & Body Works (BBWI) said in a statement that it “strongly disagrees” with the views expressed in the Third Point letter.
“It is unfortunate that Third Point has chosen to announce its intention to conduct a costly public proxy fight despite the Board’s good faith engagement efforts over the past few months,” Bath & Body said in the statement. “The Board will review and consider Third Point’s proposed nominations in due course once they are received.”
News of the Third Point power struggle was previously reported by the WSJ.
Bath & Body Works (BBWI) is scheduled to report fourth quarter results on Thursday.