Activist investor pushes Bed Bath to add 3 to board, consider buybuy BABY sale

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Bed Bath & Beyond Inc. entered into a cooperation agreement with activist investor Ryan Cohen and his company RC Ventures LLC, honoring Cohen’s request to evaluate how the company can better perform for shareholders following a letter he penned to Bed Bath’s board of directors earlier in March.

As part of the agreement, three of RC Ventures’ director designees – Marjorie Bowen, Shelly Lombard and Ben Rosenzweig – will immediately join Bed Bath’s board as independent directors; they will also stand for election as part of the company’s slate at the 2022 Annual Meeting of Shareholders.

The board will temporarily expand to 14 members before reverting to 11 members following the Annual Meeting. RC Ventures owns approximately 9.8% of the Union-based retailer’s outstanding shares.

The three board additions are retail and public company veterans, collectively bringing deep expertise in capital allocation, corporate governance, strategic planning and transactions.

Bowen is an experienced public company director with valuable experience in the consumer and retail sectors, having served as a director of companies such as Centric Brands, Genesco, Navient, Sequential Brands and Talbots. Lombard, also an experienced public company director, has expertise in capital allocation and structure strategies, corporate governance and strategic reviews. She has served as a director of INNOVATE, Alaska Communications Group and Spartacus Acquisition Corp. Rosenzweig is an experienced investor and public company director with expertise in capital allocation, corporate governance and mergers and acquisitions. Rosenzweig is also a partner at Privet Fund Management.

Bowen and Rosenzweig will join a four-member Strategy Committee looking to unlock greater value from Bed Bath’s buybuy BABY banner. Bed Bath & Beyond Independent Director Sue Gove will serve as chair of the Strategy Committee, and Independent Director Andrea Weiss will also serve on the committee.

Independent Chair of the Board Harriet Edelman said that the board believes the agreement with RC Ventures is in the best interest of shareholders.

“Over the past two years, our board has transformed the Company’s governance, management team, compensation policies, and oversight of strategy and operations. Under this board’s leadership, the Company has implemented consequential changes to our business, including the divestiture of multiple non-core assets and a significant increase in investments in structurally critical enablers of our business,” Edelman said. “The board is highly committed to fundamentally reshaping Bed Bath & Beyond for our customers while driving growth and profitability across its banners. We look forward to benefitting from the contributions and perspectives of our new directors.”

Bed Bath President and CEO Mark Tritton noted that buybuy BABY “is a tremendous asset, and we are committed to unlocking its full value. 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.”

As a result of the agreement between RC Ventures and Bed Bath & Beyond, RC Ventures will abide by certain customary standstill provisions and will support the board’s full slate of directors at the 2022 Annual Meeting.

Cleary Gottlieb Steen & Hamilton LLP is serving as legal counsel to Bed Bath & Beyond and JP Morgan Securities LLC is serving as Bed Bath & Beyond’s financial advisor.