After a dispute about the future of the company, Bed Bath & Beyond has entered into a cooperation agreement with Ryan Cohen and RC Ventures LLC, owner of 9.8% of the company’s outstanding shares, that could result in the spinoff of buybuy Baby.
As part of the agreement, RC Ventures, controlled by Chewy co-founder and Gamestop chairman Cohen, will nominate three director designees who will immediately become part of a Bed Bath & Beyond board that temporarily expands to 14 members. They also will stand for election as part of the company’s slate at the company’s 2022 annual meeting, after which the board will revert to 11 members.
Of the three RC Ventures directors, Marjorie Bowen, Shelly Lombard and Ben Rosenzweig, Bowen and Rosenzweig will join a four-member strategy committee focused on exploring alternatives to unlock greater value from the company’s buybuy Baby banner, according to the Bed Bath & Beyond statement. The strategy committee has the ability to retain independent advisors to help develop recommendations that it will make to the full board.
As a result of the agreement between it and Bed Bath & Beyond, RC Ventures has agreed to abide by certain standstill provisions and will support the board’s full slate of directors at the 2022 Annual Meeting.
In commenting on the agreement, Harriet Edelman, Bed Bath & Beyond independent board chair, said:
We are pleased to have reached this constructive agreement with RC Ventures, which we believe to be in the best interest of all our shareholders. Over the past two years, our board has transformed the company’s governance, management team, compensation policies, and oversight of strategy and operations. Under this board’s leadership, the company has implemented consequential changes to our business, including the divestiture of multiple non-core assets and a significant increase in investments in structurally critical enablers of our business. The board is highly committed to fundamentally reshaping Bed Bath & Beyond for our customers while driving growth and profitability across its banners. We look forward to benefiting from the contributions and perspectives of our new directors.
Mark Tritton, Bed Bath & Beyond’s president and CEO, added:
Our company and board have always been committed to evaluating all options to maximize long-term shareholder value, and we look forward to integrating our new directors’ ideas to drive our continued transformation. Our buybuy Baby business is a tremendous asset, and we are committed to unlocking its full value. As we move forward, our goals will continue to focus on delivering value for our shareholders, enhancing experiences for our customers, executing on the transformation throughout our business, and creating new and exciting opportunities for our dedicated employees across all our banners.
For his part, Cohen said:
The resolution announced today represents a positive outcome for all of Bed Bath’s shareholders. By refreshing the board with shareholder-designated individuals who possess capital markets acumen and transaction experience, the Company is well-positioned to review alternatives for buybuy Baby. I appreciate that management and the Board were willing to promptly embrace our ideas and look forward to supporting them in the year ahead.
