Shares of L Brands (LB) were halted Wednesday morning after Sycamore Partners notified the company it was purporting to terminate the acquisition of a majority stake in Victoria’s Secret:

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.

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