Victoria’s Secret owner, L Brands (LB), faces liquidity and solvency risk in a dispute with the private equity firm, Sycamore. In February, the companies agreed that Sycamore would receive a 55% interest in the company for $525 million. However, Sycamore withdrew to leverage the COVID-19 crisis to seek out a better price, leading to a lawsuit. Equity Research Analyst, Jen Redding, explains in Retail Dive how L Brands is could lower their asking price to reach an agreement with Sycamore due to their need for cash. Additionally, she believes if L Brands terminates the transaction with Sycamore company shares will be put at risk.
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