Bath & Body settles with activist

Article Excerpt

BATH & BODY WORKS INC. $34 is a spinoff buy. The retailer of personal care and beauty products (New York symbol BBWI; Consumer sector; Shares outstanding: 228.4 million; Market cap: $7.8 billion; Dividend yield: 2.4%; Takeover Target Rating: Medium; was formerly called L Brands (old New York symbol LB) split into two separate firms in August 2021: Victoria’s Secret and Bath & Body Works. Investors received one new share of Victoria’s Secret for every three shares of L Brands they held. L Brands then changed its name to Bath & Body Works. Activist investor Dan Loeb, through his Third Point hedge fund, owns about 6% of the stock. Under a new deal with the activist, the company has agreed to appoint its representative Thomas Kuhn as a director. The stock is down about 50% since the Victoria’s Secret spinoff. However, the company has a strong brand and should benefit from better attention to its costs. The stock trades at 11.4 times the $2.97 a..