UNION, N.J., May 10, 2019 /PRNewswire/ -- Bed Bath &
Beyond Inc. (NASDAQ: BBBY) today issued the following statement in
response to the decision by Legion Partners Asset Management
("Legion"), Macellum Advisors GP ("Macellum") and Ancora Advisors
("Ancora") (collectively the
"Activist Group") to reduce its slate of nominees to stand for
election at the Company's 2019 Annual Meeting of Shareholders from
16 to 10, and the Activist Group's subsequently filed complaint in
the United States District Court
for the Southern District of New
York against Bed Bath & Beyond and its
directors:
As part of our effort to
constructively engage with the Activist Group, we have been asking
for their input on our business plan and governance, including
inviting them to participate in our Board transformation, and
continually asking them to disclose who they actually intended to
nominate to the Board. After consistently refusing to engage in
good faith on these matters, the Activist Group has now finally
disclosed who they intend to nominate, and have reduced their
16-person list for our 10-person Board to 10 nominees.
Regarding the complaint filed by
the Activist Group with respect to the double-trigger
change-of-control provision in the Company's Indenture, the Company
has never said that it would not approve the Activist Group's
candidates once they were finally named, but rather stated that the
Board was considering the request and would act in a manner
consistent with the Company's obligations under the Indenture.
The Company has repeatedly asked
the Activist Group to allow the Board or a committee of the Board
to interview their candidates to seek to ensure that any Board
action would be consistent with the Board's fiduciary duty to its
shareholders and the Company's obligations under the Indenture. The
Activist Group has refused to cooperate and has been unwilling to
make their nominees available to be interviewed. To be clear, the
Activist Group is asking the Board to take actions that may expose
the Company and its shareholders to significant financial and
operational risk.
We continue to request that the
Activist Group allow the Board, which as of May 1, 2019, includes five new independent
directors, to interview their nominees for this purpose. If the
Activist Group continues to refuse to let us interview their 10
nominees, the Board will be compelled to assess each of the
nominees based solely on information that is publicly available and
consistent with the Company's obligations under the
Indenture.
Bed Bath & Beyond has
attempted to settle with the Activist Group on several occasions
and we remain ready and willing to engage constructively with the
Activist Group to reach a resolution.
To avoid further misinformation by the Activist Group on this
subject and to highlight the disingenuous nature of the Activist
Group's allegations included in its complaint, the Company has
included the full text of the letter that the Company's legal
counsel, Wachtell, Lipton, Rosen & Katz, sent to the Activist
Group's counsel only three days ago seeking a consensual resolution
to this matter. Of note, the Activist Group did not respond to this
letter but instead reduced its slate of candidates by six and filed
a complaint.
May 7,
2019
Elizabeth
Gonzalez-Sussman, Esq.
Olshan Frome Wolosky, LLP
1325 Avenue of the Americas
New York, New York 10019
Dear Elizabeth:
The purpose of this letter is to propose a resolution to one
disagreement between your clients and our client, Bed Bath &
Beyond Inc. (the "Company"), namely the question of whether the
Company's board of directors (the "Board") may approve your
clients' purported nominees solely for purposes of the
double-trigger change-of-control provision in the Company's First
Supplemental Indenture dated July 17,
2014 (the "Indenture"), as you have requested (the
"Requested Approval"), without exposing the Company to
risk.
As we have consistently stated, the Company is considering the
Requested Approval and continues to believe that the appropriate
next step is for the Board (or a Committee of the Board) to
interview your clients' nominees. To date your clients have
been unwilling to make their nominees available for interview
(absent an up-front agreement by the Company to cede control of the
Company to your clients). Now that the Company has
reconstituted the Board, we again request that your clients inform
the Company whether they are nominating all 16 individuals they
purported to nominate or, if not, who they are in fact intending to
nominate for the Board, and make their nominees available for
interviews so that the Board can properly consider the Requested
Approval. These interviews are needed because the information
that your clients have already provided and the business plans
proposed by your clients, as well as certain information that the
Company has uncovered that was not disclosed by your clients, and
the manner in which your clients have been conducting their
campaign for control of the Company (including making numerous
untrue and misleading statements) raise questions as to the impact
that an assumption of control of the Company by your clients and
their nominees could have on the Company and its ability to meet
its legal obligations, including under the Indenture. While
it is not clear that the prior case law on this issue, involving
Delaware corporations,
Delaware courts and single-trigger
put rights, would dictate the outcome here, it is clear even under
those prior cases that the Company must act in good faith in
determining whether to "approve" nominees for purposes of the
Indenture, and allowing your nominees to be interviewed would
significantly facilitate the Board's fulfillment of that
obligation.
If your clients are not willing to allow their nominees to be
interviewed, we request that they agree to indemnify the Company
and the Board against any risks and costs resulting from the
Requested Approval. Based on your clients' public statements
on this subject, they appear to be extremely confident that the
Board may grant the Requested Approval (which confidence we presume
must be based on your opinion), so such an indemnity should not be
problematic for them.
We look forward to hearing back from you as to whether your clients
are willing to make their nominees available for interviews, or
whether your clients are willing to indemnify the Company and the
Board against any risks and costs resulting from the Requested
Approval.
As always, the Company reserves all of its rights.
Sincerely,
Trevor S.
Norwitz
cc:
|
Allan N. Rauch, Bed
Bath & Beyond Inc.
|
|
Sabastian V. Niles,
Wachtell, Lipton, Rosen & Katz
|
|
Christopher S. Kiper,
Legion Partners Holdings, LLC
|
|
Steve Wolosky, Esq.,
Olshan Frome Wolosky, LLP
|
Goldman Sachs & Co. LLC is acting as financial advisor to
Bed Bath & Beyond, and Wachtell, Lipton, Rosen & Katz is
serving as legal counsel.
About the Company
Bed Bath & Beyond Inc. and subsidiaries (the "Company") is
an omnichannel retailer that is the trusted expert for the home and
heartfelt life events. The Company sells a wide assortment of
domestics merchandise and home furnishings. The Company also
provides a variety of textile products, amenities and other goods
to institutional customers in the hospitality, cruise line,
healthcare and other industries. Additionally, the Company is a
partner in a joint venture which operates retail stores in
Mexico under the name Bed Bath
& Beyond.
Forward-Looking Statements
This press release may contain forward-looking statements. Many
of these forward-looking statements can be identified by use of
words such as may, will, expect, anticipate, approximate, estimate,
assume, continue, model, project, plan, goal, and similar words and
phrases. The Company's actual results and future financial
condition may differ materially from those expressed in any such
forward-looking statements as a result of many factors. Such
factors include, without limitation: general economic conditions
including the housing market, a challenging overall macroeconomic
environment and related changes in the retailing environment;
consumer preferences, spending habits and adoption of new
technologies; demographics and other macroeconomic factors that may
impact the level of spending for the types of merchandise sold by
the Company; civil disturbances and terrorist acts; unusual weather
patterns and natural disasters; competition from existing and
potential competitors across all channels; pricing pressures;
liquidity; the ability to achieve anticipated cost savings, and to
not exceed anticipated costs, associated with organizational
changes and investments; the ability to attract and retain
qualified employees in all areas of the organization; the cost of
labor, merchandise and other costs and expenses; potential supply
chain disruption due to trade restrictions, political instability,
labor disturbances, product recalls, financial or operational
instability of suppliers or carriers, and other items; the ability
to find suitable locations at acceptable occupancy costs and other
terms to support the Company's plans for new stores; the ability to
establish and profitably maintain the appropriate mix of digital
and physical presence in the markets it serves; the ability to
assess and implement technologies in support of the Company's
development of its omnichannel capabilities; uncertainty in
financial markets; volatility in the price of the Company's common
stock and its effect, and the effect of other factors, on the
Company's capital allocation strategy; the impact of goodwill and
intangible asset impairments; disruptions to the Company's
information technology systems including but not limited to
security breaches of systems protecting consumer and employee
information or other types of cybercrimes or cybersecurity attacks;
reputational risk arising from challenges to the Company's or a
third party product or service supplier's compliance with various
laws, regulations or standards, including those related to labor,
health, safety, privacy or the environment; reputational risk
arising from third-party merchandise or service vendor performance
in direct home delivery or assembly of product for customers;
changes to statutory, regulatory and legal requirements, including
without limitation proposed changes affecting international trade;
changes to, or new, tax laws or interpretation of existing tax
laws; new, or developments in existing, litigation, claims or
assessments; changes to, or new, accounting standards; foreign
currency exchange rate fluctuations; the integration of acquired
businesses and potential continuing uncertainty arising in
connection the announced intention by a shareholder to seek control
of our Board of Directors. The Company does not undertake any
obligation to update its forward-looking statements.
Important Information
Bed Bath & Beyond Inc. (the "Company") intends to file a
definitive proxy statement and associated proxy card in connection
with the solicitation of proxies for the Company's 2019 Annual
Meeting with the Securities and Exchange Commission (the "SEC").
Details concerning the nominees of the Company's Board of Directors
for election at the 2019 Annual Meeting will be included in the
Proxy Statement. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND
SHAREHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT
DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING THE
COMPANY'S DEFINITIVE PROXY STATEMENT AND ANY SUPPLEMENTS THERETO,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and
shareholders will be able to obtain a copy of the definitive proxy
statement and other documents filed by the Company free of charge
from the SEC's website, www.sec.gov. The Company's shareholders
will also be able to obtain, without charge, a copy of the
definitive proxy statement and other relevant filed documents by
directing a request by mail to Bed Bath & Beyond Inc. at 650
Liberty Avenue, Union, New Jersey
07083, by contacting the Company's proxy solicitor, D.F. King &
Co., toll-free at 1 (888) 777-0320 or at bbby@dfking.com, or from
the investor relations section of the Company's website at
www.bedbathandbeyond.com.
Participants in the Solicitation
The Company, its directors and certain of its executive officers
will be deemed participants in the solicitation of proxies from
shareholders in respect of the 2019 Annual Meeting. Information
regarding the names of the Company's directors and executive
officers and their respective interests in the Company by security
holdings or otherwise is set forth in the Company's Annual Report
on Form 10-K for the fiscal year ended March
2, 2019, filed with the SEC on April
30, 2019, the Company's Current Reports on Form 8-K filed
with the SEC on June 5, 2018 and
April 22, 2019 (as amended by the
Form 8-K/A filed with the SEC on May 3,
2019) and the Company's definitive proxy statement for the
2018 Annual Meeting of Shareholders, filed with the SEC on
May 31, 2018. To the extent holdings
of such participants in the Company's securities have changed since
the amounts described in the proxy statement for the 2018 Annual
Meeting of Shareholders, such changes have been reflected on
Initial Statements of Beneficial Ownership on Form 3 or Statements
of Change in Ownership on Form 4 filed with the SEC. These
documents can be obtained free of charge from the sources indicated
above. Additional information regarding the interests of these
participants in any proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will also be included in any proxy statement and other relevant
materials to be filed with the SEC, if and when they become
available.
CONTACTS:
INVESTOR CONTACT: Janet M. Barth, (908) 613-5820 or IR@bedbath.com
MEDIA CONTACT: Matthew Sherman /
Tim Lynch / Adam Pollack / Arielle
Rothstein
Joele Frank, Wilkinson Brimmer
Katcher, (212) 355-4449
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SOURCE Bed Bath & Beyond Inc.