“By refreshing the board with shareholder-designated individuals (Bed Bath & Beyond) is well-positioned to review alternatives for buybuy BABY,” Cohen said.
Bed, Bath & Beyond (BBBY) – Get Bed Bath & Beyond Inc. Report shares surged higher Friday after the home goods retailer reached a deal with activist investor Ryan Cohen to add new members to the board and explore the sale of its buybuy Baby division.
RC Ventures LLC, an investment group controlled by the GameStop GME chairman, has pushed Bed, Bath & Beyond to consider several strategic alternatives, including a full company sale, since revealing a near 10% stake in the group earlier this month.
Cohen, the founder of online pet supply group Chewy.com, has also pushed for the sale of the group’s stand-out buybuyBaby division, which posted solid comp sales growth and a 35.9% gross margin over three months ending in December.
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Under terms of the agreement made public Friday, Bed Bath & Beyond will add three new members to its temporarily-expanded board — Marjorie Bowen, Shelly Lombard and Ben Rosenzweig — and form a four-member strategy committee, including current board member Sue Gove, to “explore alternatives to unlock greater value from the Company’s buybuy BABY banner.”
“By refreshing the Board with shareholder-designated individuals who possess capital markets acumen and transaction experience, the Company is well-positioned to review alternatives for buybuy BABY,” Cohen said. “I appreciate that management and the Board were willing to promptly embrace our ideas and look forward to supporting them in the year ahead.”
Bed, Bath & Beyond shares were marked 11.5% higher in pre-market trading Friday to indicate an opening bell price of $24.64 each.
“Our buybuy BABY business is a tremendous asset, and we are committed to unlocking its full value,” said CEO Mark Tritton. “As we move forward, our goals will continue to focus on delivering value for our shareholders, enhancing experiences for our customers, executing on the transformation throughout our business, and creating new and exciting opportunities for our dedicated employees across all our banners.”
