Activist Dan Loeb ups his stake in Bath & Body Works Inc

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on Dec 9, 2022

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Activist Dan Loeb ups his stake in Bath & Body Works Inc

Third Point's Loeb now has a 6.0% stake in Bath & Body Works Inc.
He explained what he's after on a call with CNBC's Scott Kirby.
Bath & Body Works stock is currently down nearly 40% year-to-date.

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Bath & Body Works Inc (NYSE: BBWI) is trading up on Friday after Dan Loeb revealed to have increased his stake in specialty retailer to 6.0%.

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Loeb wants seats on the board

According to the activist investor, the Ohio-based company is not “mismanaged” but there’s certainly some room for improvement on the execution and capital allocation side of things.

Speaking with CNBC’s Scott Kirby, he also took an issue with a rather extravagant compensation to the interim chief executive that was untethered to the performance metrics.

Third Point’s Loeb confirmed that he’s after board seats to push for changes at the retail firm. In total, he now owns 13.75 million shares of Bath & Body Works Inc.

Versus the start of 2022, the stock is down nearly 40% at writing.

BBWI should trade at a higher multiple

A reasonable multiple for this company, Loeb added on the call with CNBC’s Scott Kirby, would be around 15 times forecast earnings. In comparison, it’s currently trading at 10 times.

Loeb further said that a proxy fight wasn’t his preference but he’d be open to it if need be. Bath & Body Works Inc has responded with the following statement to CNBC:

We value the view of our shareholders, and we will continue to make decisions and take actions that we believe are in the best interests of the company and our shareholders.

Last month, Bath & Body Works Inc reported a solid results for its third financial quarter and raised its outlook for the future (read more).