Victoria's Secret & Co. (NYSE:VSCO) has adopted a limited-duration shareholder rights plan, commonly referred to as a “poison pill,” to prevent a potential hostile takeover attempt by Australian billionaire Brett Blundy’s investment firm BBRC.
BBRC has steadily increased its stake in Victoria’s Secret to about 13% of its outstanding shares, including acquiring shares in violation of US antitrust laws by failing to file the required forms for three years. The company has now corrected this, which could allow it to acquire up to 49.99% of Victoria’s Secret’s voting shares as soon as May 21, Victoria's Secret said on Tuesday.
Under the rights plan, Victoria’s Secret will issue one right for each share at the close of business on May 29. The rights will only become exercisable if a shareholder acquires 15% or more of the company’s shares.
Victoria’s Secret highlighted BBRC’s track record of acquiring controlling interests in retail companies and its recent launch of a new business described as a global lingerie, sleepwear and beauty brand.
“In light of the circumstances and consistent with its fiduciary duties, the board determined it was necessary to adopt a rights plan to protect the long-term interests of all Victoria’s Secret shareholders and guard against tactics to gain control of the company without paying all shareholders an appropriate premium for that control,” Victoria’s Secret board chair Donna James said in a statement.
James added that the company will continue to engage in “open and constructive” dialogue with Blundy and other representatives of BBRC.
The rights plan has a one-year term, expiring on May 18, 2026.
Shares of Victoria’s Secret traded 2% higher on the development at about $23.