L Brands, Inc. (NYSE: LB) today announced that Sycamore Partners delivered a notice on April 22, 2020 purporting to terminate the Feb. 20, 2020 transaction agreement (“Transaction Agreement”) relating to the sale of a 55% interest in Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK (collectively, Victoria’s Secret) announced on Feb. 20, 2020. Sycamore Partners also filed a lawsuit in the Court of Chancery of the State of Delaware on April 22, 2020 seeking a declaratory judgment that its termination of the Transaction Agreement is valid.
L Brands believes that Sycamore Partners’ purported termination of the Transaction Agreement is invalid. L Brands will vigorously defend the lawsuit and pursue all legal remedies to enforce its contractual rights, including the right of specific performance. L Brands intends to continue working towards closing the transactions contemplated by the Transaction Agreement.
LB was off over 20% on the news. L Brands believes such a termination of the termination is invalid. The company vowed to defend Sycamore’s lawsuit and to continue to work towards closing the deal. I believe LB could fall much further on the news.