A Victoria's Secret Buyer Tried To Pull Out Of The Deal
Private equity firm Sycamore Partners has withdrawn its intention to buy a 55% stake in Victoria's Secret underwear brand, according to the current owner of the brand, L Brands. She considers Sycamore Partners' offer invalid and intends to defend this position in court.
The L Brands States that it received a letter of withdrawal from the preliminary agreement from Sycamore Partners and Sycamore Partners filed a lawsuit in Delaware state court to confirm the legality of the withdrawal.
The deal between L Brands and Sycamore Partners was announced on February 20. According to preliminary conditions, the investment company will get control of Victoria's Secret, and the remaining 45% of L Brands shares will be transferred to a separate company. The Victoria's Secret brand was valued at $1.1 billion, sources told The Wall Street Journal, with an expected transaction amount of $525 million.
L Brands in addition to Victoria's Secret owned brands Pink and Bath & Body Works. Sycamore Partners previously bought several clothing manufacturers and sellers in a difficult situation – Nine West, Talbots, and Hot Topic. Even before the coronavirus pandemic, Victoria's Secret faced a drop in sales. L Brands shares fell more than 20% after news of possible deal failure, according to the WSJ.