Victoria's Secret Uses 'Poison Pill' as Brett Blundy's BBRC Increases Stake

On May 20, Australian billionaire Brett Blundy's investment vehicle, BBRC International Private Limited, increased its stake in the lingerie manufacturer, Victoria's Secret & Co. (NYSE:VSCO), to implement a limited-duration shareholder rights plan. According to Board Chair Donna James, the "poison pill" prevents anyone from taking over the business without paying all shareholders a fair premium.

One right will be granted per share on May 29 under the proposal, and it will only be exercisable if one investor purchases 15% or more of Victoria's Secret & Co. (NYSE:VSCO) shares. After the announcement, shares began trading at $22.87, which showed a slight increase.

Since March, BBRC has acquired over 10.31 million shares, or 13% of Victoria's Secret & Co. (NYSE:VSCO). According to the retailer, BBRC purchased stock for over three years without submitting required antitrust filings, but the company has already rectified the documentation, allowing it to raise its holding to as much as 49.99% once a mandated waiting period ends on May 21.

Victoria's Secret & Co. (NYSE:VSCO) is facing weak demand as consumers reduce their discretionary spending due to recession concerns and tariff uncertainties. As the business completes its turnaround, the right strategy seeks to maintain strategic flexibility. Board concerns about possible creeping acquisition methods have been heightened by BBRC's history of gaining control of retail firms, including the recent introduction of its own lingerie and beauty line and its support of companies like Bared Footwear and Oz Hair & Beauty.

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