MW Why Victoria's Secret moved to block an activist investor from buying up stock

By Steve Gelsi

Underwear company adopts a so-called poison pill after activist shareholder Blundy boosts stake and switches stock-holding classification to active from passive

Victoria's Secret has been in talks with Australian activist shareholder Brett Blundy for the past three years about a path to grow the retailer and boost returns, but now the undergarments brand is taking a more defensive approach to keep its current management in place.

The company said it is also looking to protect shareholders from someone looking to take advantage of the recent selloff in the stock to buy up shares at prices that don't reflect the actual value of the company.

Victoria's Secret $(VSCO)$ said that, while it values Blundy's input, it has now adopted a "poison pill" to prevent him from amassing a controlling take in the company.

The measure, which the company called a "limited duration shareholder rights plan," is similar to others used by public companies to ward off hostile takeovers. It calls for the issuance of one right to buy stock for each share of common stock, which becomes exercisable only if any person, or group of people, acquires 15% or more of the outstanding common stock.

Once triggered, the rights plan creates more total shares of common stock in the company in order to reduce the percentage ownership by a hostile investor and makes it more expensive for that party to take control of a company.

Victoria's Secret said the move was prompted by Blundy's switch in February to 13D ownership filings from 13G filings. The former filing type signals that the investor plans to influence the path of the company instead of being a passive 13G investor.

It also comes after a period of "substantial market dislocation" in the retail sector, which led to a sharp drop in Victoria's Secret's stock price.

Victoria's Secret stock was up 3.5% in morning trading but has tumbled 43.1% so far in 2025. In comparison, the SPDR S&P Retail ETF XRT has slipped 3.6% this year, while the S&P 500 index SPX has gained 1.1%.

Victoria's Secret Chair Donna James said the rights plan will "protect the long-term interests of all Victoria's Secret shareholders and guard against tactics to gain control of the company without paying all shareholders an appropriate premium for that control."

MarketWatch has reached out to Blundy's firm, BBRC, for comment.

Victoria's Secret said it's "managing near-term headwinds in the macro environment" while working to "unlock the full potential of our brands" under Chief Executive Hillary Super, who was hired last summer.

The company said BBRC has launched a new global lingerie, sleepwear and beauty brand while increasing its ownership position in Victoria's Secret to about 13% starting in March. That would make Blundy the second largest shareholder, according to FactSet data, behind BlackRock Fund Advisors with its 14% stake.

"BBRC made acquisitions of the company's common stock in violation of U.S. antitrust law for nearly three years by failing to file forms required under the Hart-Scott-Rodino Act and observe the regulatory waiting period, and now has made corrective filings," the company said.

Those corrective filings would have allowed BBRC to buy up to 49.99% of its voting stock at the end of a waiting period at 11:59 p.m. Eastern time, on May 21.

"BBRC has a track record of acquiring controlling interests in retail companies," Victoria's Secret said.

Blundy's current holdings include California's Hot 8 Yoga, Best & Less in Australia and New Zealand, and Australian fashion brand Dissh, while prior investments have included Honey Birdette and Bras N Things.

-Steve Gelsi

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May 20, 2025 11:33 ET (15:33 GMT)

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