Bed Bath & Beyond (NASDAQ:BBBY) settled a months-long spat with a trio of activist investors on Wednesday, saying it would nominate four new members to its board of directors in addition to finding a permanent replacement for former CEO Steven Temares.
Bed Bath & Beyond also agreed to form a committee that, among other duties, will weigh the potential sale or spinoff of underperforming businesses
Those businesses, including Cost Plus World Market, Buy Buy BABY, PersonalizationMall and Christmas Tree Shops in sum are worth as much as $1.36 billion, or about $10 per share, according to its three investor groups.
"We are pleased to have reached this resolution with Bed Bath & Beyond, which is the result of collaborative dialogue and intensive engagement with the Company," the investor group said in a press release Wednesday.
"We are optimistic about the company’s efforts to find a best-in-class CEO to drive shareholder value and applaud the Board’s commitment to building an even stronger future for shareholders."
An operator of more than 1,000 stores across the U.S. and Puerto Rico, Bed Bath & Beyond is susceptible to the online competition that ushered other mall-based retailers like Sears Holdings and Toys “R” Us Inc. into bankruptcy. The chain laid off nearly 150 people in March, affecting its Christmas Tree Shops business, a discount home decor chain it acquired in 2003.
BBBY’s underperformance may have posed an attractive entry point for the activist trio, which first leveraged their approximate 5% stake in March with calls to replace the company’s entire 12-person board.
Shares retreated 26 cents, or 1.9%, to $13.24
