The board of Bath & Body Works Inc. BBWI told shareholders Monday that it has taken “all reasonable steps” to avoid a proxy fight with shareholder Third Point LLC, but that it would not bend to the ultimatum of its founder and CEO Dan Loeb that it add his protégé Munib Islam to the board. In a letter to shareholders, the board said it had reviewed Islam’s qualifications and skills at length and concluded that he would be not the right fit. The board has demonstrated openness to Loeb’s views and has followed them where they made sense. For example, it agreed with Third Point’s recommendation to appoint Lucy Brady as a director “based on her exceptional global digital strategy and customer loyalty and engagement experience.” The board also hired a technology services company recommended by Loeb and agreed that it would benefit from additional financial and capital allocation expertise. “It is disappointing and unfortunate that despite repeated efforts to engage productively with Third Point, the company will have to spend time, effort and resources on a costly proxy fight resulting from Mr. Loeb’s unreasonable insistence that his personal protégé be appointed to the Board,” said the letter. The stock has fallen 20% in the last 12 months, while the S&P 500 SPX has fallen 9%.
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