Key Takeaways
- • Third Point has accumulated a 6.1% stake in Bath & Body Works (13.7 million shares) and filed a 13D regulatory disclosure signaling a potential proxy contest to force board changes.
- • The hedge fund, run by billionaire Daniel Loeb and managing approximately $12 billion in assets, began accumulating shares in October when the stock had declined nearly 40% year-to-date.
- • Third Point is criticizing the Bath & Body Works board for approving excessive executive compensation packages and insufficient cost discipline, citing poor governance oversight.
- • The filing triggered immediate positive market reaction, with Bath & Body Works stock climbing in after-hours trading following the announcement on December 8, 2022.
- • This marks Third Point's recent pattern of activist board interventions following successful settlements at Disney (September 2022) and ongoing pressure at Colgate-Palmolive, though the fund's last full proxy contest was Campbell Soup in 2018.
Summary
Third Point LLC, the New York-based hedge fund founded and managed by billionaire investor Daniel Loeb, has disclosed a 6.1% ownership stake in Bath & Body Works through a 13D regulatory filing on December 8, 2022. The filing represents 13.7 million shares acquired primarily during October 2022, when the retailer's stock was under significant pressure, having declined approximately 40% over the year. The filing signals Third Point's intent to pursue board-level changes at the company, a strategic move that the firm rarely executes and which typically precedes proxy contests.
Third Point's criticisms center on governance failures, specifically targeting the board's approval of what the fund characterizes as excessive executive compensation packages without corresponding cost discipline. The timing coincides with Bath & Body Works' November 2022 appointment of Gina Boswell, a former Unilever senior executive, as chief executive officer. The retailer currently carries a market capitalization of approximately $9.6 billion. Third Point's filing triggered positive investor reaction, with stock price appreciation in after-hours trading following the disclosure.
This activist initiative reflects Third Point's recent track record of board interventions at major corporations. The fund successfully negotiated a settlement with The Walt Disney Company in September 2022 to add a new director to its board, and has simultaneously maintained pressure on Colgate-Palmolive for board modifications. Third Point's most recent full proxy contest occurred at Campbell Soup in 2018, where the fund initially proposed replacing the entire board but settled the dispute days before the shareholder vote, citing the board's responsibility for lagging stock performance and debt-laden acquisitions.
The 6.1% stake positions Third Point as a material shareholder alongside existing major institutional holders including The Vanguard Group (12.92%), BlackRock Institutional Trust Company (8.88%), and Fidelity Management & Research Company (7.19%). Third Point's filing and public letter to shareholders establish the foundation for either direct board negotiations or a proxy contest if management negotiations prove unsuccessful.
Third Point's criticisms center on governance failures, specifically targeting the board's approval of what the fund characterizes as excessive executive compensation packages without corresponding cost discipline. The timing coincides with Bath & Body Works' November 2022 appointment of Gina Boswell, a former Unilever senior executive, as chief executive officer. The retailer currently carries a market capitalization of approximately $9.6 billion. Third Point's filing triggered positive investor reaction, with stock price appreciation in after-hours trading following the disclosure.
This activist initiative reflects Third Point's recent track record of board interventions at major corporations. The fund successfully negotiated a settlement with The Walt Disney Company in September 2022 to add a new director to its board, and has simultaneously maintained pressure on Colgate-Palmolive for board modifications. Third Point's most recent full proxy contest occurred at Campbell Soup in 2018, where the fund initially proposed replacing the entire board but settled the dispute days before the shareholder vote, citing the board's responsibility for lagging stock performance and debt-laden acquisitions.
The 6.1% stake positions Third Point as a material shareholder alongside existing major institutional holders including The Vanguard Group (12.92%), BlackRock Institutional Trust Company (8.88%), and Fidelity Management & Research Company (7.19%). Third Point's filing and public letter to shareholders establish the foundation for either direct board negotiations or a proxy contest if management negotiations prove unsuccessful.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.