Winging it

5 May 2020 By Jeffrey Goldfarb Follow @jgfarb

A flock of buyers is citing Covid-19 to wriggle out of acquisitions. Legal flaps may determine the fates for targets Moss Bros, Delphi, Metlifecare and a Bed Bath & Beyond business. Despite some questionable arguments, negotiating power favours the yellow-bellied birds of prey.

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Victoria’s Secret owner L Brands said on May 4 that it had agreed to terminate a sale of the lingerie retailer to private equity firm Sycamore Partners, averting a legal battle over the $525 million deal. L Brands originally challenged allegations by Sycamore that terms of the agreement had been breached.

Separately, Metlifecare said on April 28 that it had rejected Swedish buyout firm EQT’s notice to terminate its agreed NZ$1.5 billion ($900 million) acquisition of the New Zealand-based retirement home operator.

Metlifecare said it remains committed to completing the sale despite EQT’s claim that it is legally entitled to walk away because of an unexpected change in the company’s financial condition from the pandemic.

“There is no basis to suggest that these changes in general economic conditions and changes in law have had a materially disproportionate effect on Metlifecare,” the company said.

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