(Reuters) - Bath & Body Works Inc said on Monday investor Third Point's potential proxy contest is misguided and is a result of the specialty retailer not willing to appoint the hedge fund's former co-chief investment officer to its board.
Billionaire investor Daniel Loeb had last week told the company that Third Point was planning a board challenge as the addition of new directors does not address his concerns about governance, capital allocation and executive pay.
Bath & Body Works said in the last twelve months the board has appointed four highly qualified directors, of which Lucy Brady, a senior executive at Conagra Brands (NYSE:CAG), was proposed by Third Point.
In a letter to its shareholders, the company said the potential proxy contest was due to the board's unwillingness to appoint Loeb's former partner Munib Islam to the board.
Islam, who played a key role in Third Point's activist campaigns, left the firm in 2020 and is now a senior executive at LTS One, an investment partnership.
While it has taken "reasonable" steps to avoid a proxy fight, Bath & Body Works said it is "disappointing and unfortunate" that it will have to spend more time on this despite efforts to engage productively with the hedge fund.
Third Point, which had in December said it had a roughly 6% stake, did not immediately respond to a Reuters request for comment.