NEW YORK — Limited Inc. is getting intimate again with Victoria's Secret, proposing to buy back the rest of Intimate Brands Inc., the owner of the sexy lingerie business, for $1.4 billion.
Limited Inc., owner of 84% of Intimate Brands, which also sells Bath & Body Works and products, said Monday that it launched an exchange offer for the remaining 16% of Intimate Brands, in a move to allow for greater growth.
The offer values Intimate Brands at about $18.57 a share, a premium of about 6% from its Monday closing price of $17.50 on the New York Stock Exchange. News of the deal sent the shares up as much as 22% to $17.72 in after-hours trading.
Shares of Limited closed off 70 cents to $17.75 on the NYSE, before the deal was announced.
The Columbus, Ohio-based retailer, which had spun off Intimate Brands in 1995, said it will offer 1.046 shares of Limited common stock for each outstanding share of Intimate Brands Class A common stock.
Limited also said it expects its January sales and fiscal fourth-quarter profit to "significantly" exceed Wall Street estimates but added that the retail environment would be challenging in the first half.
Earnings should reach 72 to 74 cents a share in the quarter, compared with the 59-cent average estimate of analysts and up from 55 cents a year ago, Limited said.
The Intimate Brands deal comes less than a week after Rob Bernard, Limited Stores president and chief executive, resigned.