SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
To
Section 13 or 15(d) of
The
Securities Exchange Act of 1934
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Date
of report
(Date of earliest event reported): July 6,
2007
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Limited
Brands, Inc.
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(Exact
Name of
Registrant
as
Specified
in Charter)
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Delaware
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(State
or
Other Jurisdiction of Incorporation)
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1-8344
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31-1029810
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(Commission
File Number)
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(IRS
Employer
Identification No.)
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Three
Limited Parkway
Columbus,
OH
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43230
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(Address
of
Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number,
including area code: (614)
415-7000
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(Former
Name
or Former Address, if Changed Since Last Report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing
obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01.
Entry into a Material Definitive Agreement
As
previously announced, on May 15, 2007,
Limited Brands, Inc., a Delaware corporation (“Limited
Brands”), entered into a Unit Purchase Agreement (the “Purchase
Agreement”) with Express Investment Corp., a Delaware corporation and
an affiliate of Golden Gate Private Equity, Inc. (“Buyer”),
Limited Brands Store Operations, Inc., a Delaware corporation
(“Seller”), and Express Holding, LLC, a Delaware limited
liability company (the “Company”), pursuant to which Seller, a
wholly owned subsidiary of Limited Brands, agreed to sell 66⅔% of the Company to
Buyer.
On
July 6, 2007, the parties to the Purchase
Agreement entered into Amendment No. 1 to Unit Purchase Agreement (the
“Amendment”), pursuant to which the Purchase Agreement was
amended to provide, among other things, for the sale by Seller of an additional
8⅓% of the Company to Buyer in exchange for an additional $53,875,000 to be paid
by Buyer to Seller. As a result of the Amendment, Buyer agreed to
purchase at the closing of the acquisition in the aggregate 75% of the Company
and Limited Brands, through its subsidiaries, agreed to retain a 25% ownership
interest in the Company.
The
foregoing summary of the Amendment does not
purport to be complete and is subject to, and qualified in its entirety by,
the
full text of the Purchase Agreement, which is attached as Exhibit 2.1 and
incorporated herein by reference, and the full text of the Amendment, which
is
attached as Exhibit 2.2 and incorporated herein by reference.
Item 8.01. Other
Events.
On
July 6, 2007, immediately following the
entry into the Amendment, Limited Brands completed the sale of 75% of the
Company to Buyer pursuant to the terms of the Purchase Agreement (as amended
by
the Amendment). Under the terms of the Purchase Agreement (as so
amended), Seller will receive in total $601,875,000 in cash in connection with
the consummation of the transaction.
On
July 9, 2007, Limited Brands issued a press
release announcing the completion of the sale described above as well as the
entry into a definitive agreement to dispose of a 75% interest in its Limited
Stores business to affiliates of Sun Capital Partners. The press release is
attached as Exhibit 99.1 and is incorporated herein by reference.
Item
9.01. Financial Statements and Exhibits
(c) Exhibits
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Exhibit
No.
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Description
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2.1
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Unit
Purchase
Agreement dated as of May 15, 2007 among Limited Brands, Inc., Express
Investment Corp., Limited Brands Store Operations, Inc. and Express
Holding, LLC (incorporated by reference to Exhibit 2.1 to the Current
Report on Form 8-K of Limited Brands, Inc. filed on May 15,
2007).
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2.2
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Amendment
No.
1 to Unit Purchase Agreement dated as of July 6, 2007 among Limited
Brands, Inc., Express Investment Corp., Limited Brands Store Operations,
Inc. and Express Holding, LLC.
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99.1
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Press
release
issued by Limited Brands, Inc., dated July 9,
2007.
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SIGNATURES
Pursuant
to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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LIMITED
BRANDS, INC.
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Date:
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July
9,
2007
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By:
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/s/ Douglas L. Williams | |||
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Name:
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Douglas
L.
Williams
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Title:
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Senior
Vice
President and General Counsel
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EXHIBIT
INDEX
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Exhibit
No.
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Description
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2.1
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Unit
Purchase
Agreement dated as of May 15, 2007 among Limited Brands, Inc.,
Express
Investment Corp., Limited Brands Store Operations, Inc. and Express
Holding, LLC (incorporated by reference to Exhibit 2.1 to the Current
Report on Form 8-K of Limited Brands, Inc. filed on May 15,
2007).
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2.2
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Amendment
No.
1 to Unit Purchase Agreement dated as of July 6, 2007 among Limited
Brands, Inc., Express Investment Corp., Limited Brands Store Operations,
Inc. and Express Holding, LLC.
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99.1
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Press
release
issued by Limited Brands, Inc., dated July 9,
2007.
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Exhibit
2.2
AMENDMENT
NO. 1 TO UNIT PURCHASE AGREEMENT
AMENDMENT
NO. 1 TO UNIT PURCHASE AGREEMENT (this “Amendment”), dated as
of July 6, 2007, among Express Investment Corp., a Delaware corporation
(“Buyer”), Limited Brands Store Operations, Inc., a Delaware
corporation (“Seller”), Limited Brands, Inc., a Delaware
corporation (“Limited Brands”), and Express Holding, LLC, a
Delaware limited liability company (the
“Company”).
WHEREAS,
the parties hereto have entered into a Unit Purchase Agreement dated as of
May
15, 2007 (the “Purchase Agreement”);
WHEREAS,
Section 14.02(a) of the Purchase Agreement provides that the Purchase Agreement
may be amended in writing if signed by each party to the Purchase Agreement;
and
WHEREAS,
the parties hereto desire to amend the Purchase Agreement as set forth
herein.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the parties hereto agree as follows:
Section
1. Definitions. All
capitalized terms used herein but not defined herein shall have the meanings
ascribed to them in the Purchase Agreement.
Section
2. Increase
in Units Sold to Buyer. The Purchase Agreement is hereby amended
to provide for the sale by Seller to Buyer of additional Units representing
8⅓%
of the aggregate Units of the Company in exchange for the payment by Buyer
to
Seller of an additional $53,875,000, as follows:
(a) The
cover
page of the Purchase Agreement and the recitals to the Purchase Agreement are
each amended by replacing all references to “66 2/3%” and “33 1/3%” with “75%”
and “25%”, respectively.
(b) Section
2.01(a) of the Purchase Agreement is amended by adding the following sentence
immediately after the first full sentence set forth therein:
“The
aggregate purchase price for the Sold Units is $484,875,000 in cash, payable
in
installments, with the Closing Purchase Price to be paid at the Closing in
accordance with this Section 2.01(a) and Section 2.02(i) and the Installment
Purchase Price to be paid on or prior to the Installment Payment Date in
accordance with Section 2.01(c).”
(c) Section
2.01(a)(i) of the Purchase Agreement is deleted in its entirety and replaced
with the following:
“(i) $431,000,000
in cash from Buyer representing the portion of the purchase price for the Sold
Units to be paid at Closing (the “Closing Purchase Price”),
plus”
(d) All
references to “Purchase Price” in the Purchase Agreement are replaced with the
words “Closing Purchase Price”.
(e) Section
2.01 of the Purchase Agreement is amended by inserting a new Section 2.01(c)
as
follows:
“(c) No
later than July 31, 2007 (the “Installment Payment Date”),
Buyer shall pay to Seller $53,875,000 (the “Installment Purchase
Price”), representing the portion of the purchase price for the Sold
Units not paid at Closing. Buyer shall deliver to Seller the
Installment Purchase Price in immediately available funds by wire transfer
to
the account designated by Seller pursuant to Section 2.02(i) with respect to
the
Closing Purchase Price (or if not so designated, then by certified or official
bank check payable in immediately available funds to the order of Seller in
such
amount).”
(f) Section
5.05 of the Purchase Agreement is deleted in its entirety and replaced with
the
following:
“Section
5.05. Financing. Buyer has and will have prior to
the Closing sufficient cash, available lines of credit or other sources of
immediately available funds necessary to enable it to pay the Closing Payment
at
Closing and any other amounts payable by Buyer hereunder when
due. Buyer will have on or prior to the Installment Payment Date
sufficient cash, available lines of credit or other sources of immediately
available funds necessary to enable it to pay the Installment Purchase Price
on
the Installment Payment Date. As of the date hereof, Buyer has
received and furnished a copy to Seller of the equity commitment letter dated
as
of the date hereof between Golden Gate Private Equity, Inc. and Buyer pursuant
to which Golden Gate Private Equity, Inc. has agreed to make an equity
commitment to Buyer no later than the Installment Payment Date in an aggregate
amount equal to the Installment Purchase Price.”
Section
3. Flexible
Spending Account Plan. The third, fourth and fifth sentences of
Section 10.03(d) of the Purchase Agreement are hereby deleted in their entirety
and replaced with the following:
“As
of
January 1, 2008, the Company shall establish flexible spending accounts for
medical and dependent care expenses under a new or existing plan
(“Company’s FSA”) for each Covered Employee who elects to
participate in the Company’s FSA. On May 1, 2008 or as soon as
practicable thereafter, Seller shall pay to the Company the net
aggregate
amount
of
the Covered Employees’ account balances credited under the Seller’s flexible
spending account plan (“Seller’s FSA”), if such amount is
positive, and the Company shall pay to Seller the net aggregate amount of the
Covered Employees’ account balances credited under Seller’s FSA, if such amount
is negative.”
Section
4. Indemnification
for Liabilities under Employee Benefit Plans. Section 10.03(g)
of the Purchase Agreement is hereby deleted in its entirety and replaced with
the following:
“Except
as expressly assumed by the
Company under this Section 10.03, Section 10.04 and Section 10.05 or
to the
extent provided in the Services Agreement, Seller and its Affiliates
shall be responsible for and shall indemnify and hold the Company and its
Subsidiaries harmless for all liabilities (i) relating to any employee benefit
plan (including any and all worker’s compensation claims) currently or formerly
maintained or contributed to by Limited Brands, the Company or any Subsidiary
or
any ERISA Affiliate thereof and (ii) incurred prior to the effectiveness of
the
Closing with respect to any Company Employee. For purposes of this
Section 10.03(g), a worker’s compensation claim shall be “incurred” when the
event giving rise to such claim occurred.”
Section
5. Savings
and Retirement Plan. Section 10.04(a) of the Purchase Agreement
is hereby deleted in its entirety and replaced with the following:
“Effective
as of the Closing Date,
Limited Brands shall amend each of the tax-qualified defined contribution plans
in which Covered Employees participate (the “Seller Savings
Plans”) to cause the active participation of each Covered Employee in
the Seller Savings Plans to cease as of the end of the payroll period in which
the Closing Date occurs.”
Section
6. Replacement
of Exhibits. Exhibits A, B, C, D, E, F, G, H, I, J and K to the
Purchase Agreement are replaced in their entirety by Exhibits A, B, C, D, E,
F,
G, H, I, J and K attached hereto, respectively.
Section
7. Defined
Term References. Section 1.01(b) of the Purchase Agreement is
hereby amended by:
(a) deleting
the following from the table set forth therein:
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Purchase
Price
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2.01(a)
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(b) inserting,
in the appropriate alphabetical order, the following to the table set forth
therein:
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Closing
Purchase Price
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2.01(a)
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Installment
Payment Date
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2.01(c)
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Installment
Purchase Price
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2.01(c)
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Section
8. Disclosure
Schedule. Section 3.15 of the Disclosure Schedule is hereby
amended to replace the table therein titled “Approved PCRs” with the table
attached hereto as Annex A.
Section
9. Amendment. Except
as expressly set forth in this Amendment, this Amendment shall not constitute
an
amendment or modification of any other provision of the Purchase
Agreement. Each reference to “hereof”, “hereunder”, “herein” and
“hereby” and each other similar reference, and each reference to “this
Agreement” and each other similar reference contained in the Purchase Agreement
shall refer to the Purchase Agreement as amended by this Amendment.
Section
10. Governing
Law. This Amendment shall be governed by and construed in
accordance with the law of the State of New York, without regard to the
conflicts of law rules of such state.
Section
11. Counterparts. This
Amendment may be signed in any number of counterparts, each of which shall
be an
original, with the same effect as if the signatures thereto and hereto were
upon
the same instrument. This Amendment shall become effective when each
party hereto shall have received counterparts hereof signed by the other party
hereto.
[Signature
page follows]
IN
WITNESS WHEREOF, the parties hereto
have caused this Amendment to be duly executed as of the day and year first
above written.
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EXPRESS
INVESTMENT CORP.
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By:
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/s/ Stefan Kaluzny |
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Name:
Stefan Kaluzny
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Title: President
and Chief Executive Officer
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LIMITED
BRANDS STORE OPERATIONS, INC.
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By:
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/s/ Timothy J. Faber | |
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Name:
Timothy J. Faber
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Title: Senior
Vice President – Treasury/Mergers &
Acquisitions
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LIMITED
BRANDS, INC.
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By:
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/s/ Timothy J. Faber |
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Name:
Timothy J. Faber
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Title:
Vice President – Treasury/Mergers &
Acquisitions
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EXPRESS
HOLDING, LLC
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By:
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Limited
Brands Store Operations, Inc., as Member
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By:
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/s/ Timothy J. Faber | |
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Name:
Timothy J. Faber
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Title:
Senior Vice President – Treasury/Mergers &
Acquisitions
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By:
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EXP
Investments, Inc., as Member
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| By: | /s/ Douglas L. Williams | |
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Name:
Douglas L. Williams
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Title:
Senior Vice President – Enterprise General
Counsel
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Exhibit
99.1
LIMITED
BRANDS TAKES ACTIONS
TO
FURTHER ITS FOCUS ON INTIMATE APPAREL AND PERSONAL CARE
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·
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COMPLETES
SALE OF MAJORITY INTEREST IN EXPRESS
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·
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SIGNS
DEFINITIVE AGREEMENT TO TRANSFER MAJORITY INTEREST IN
LIMITED
STORES
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Columbus,
Ohio, July 9, 2007 — Limited Brands, Inc. (NYSE: LTD) today announced the
completion of the sale of Express and entry into a definitive agreement to
transfer a majority interest in its Limited Stores business.
“We
have
moved from a portfolio of brands and businesses to an enterprise powered
by two
world-leading brands: Victoria’s Secret and Bath and Body Works … the
best brands in intimate apparel and personal care. These strategic
actions will better position Express and Limited Stores for future growth
and
profitability and enable the ‘new’ Limited Brands to derive the benefit of our
increased focus,” said Leslie H. Wexner, chairman and chief executive officer of
Limited Brands, Inc.
Express
Limited
Brands announced that it has finalized the sale of a 75 percent ownership
interest in its Express brand to affiliates of Golden Gate Capital for pre-tax
cash proceeds of $602 million, subject to closing
adjustments. Limited Brands and Golden Gate Capital agreed to
increase Golden Gate Capital’s stake to 75 percent from the previously announced
67 percent. The change will result in an additional $54 million in
pre-tax cash proceeds to Limited Brands which is included in the above-stated
$602 million. After pre-closing adjustments, Limited Brands expects
to receive after-tax cash proceeds of approximately $425 million and to record
an after-tax gain of approximately $188 million, both subject to post-closing
adjustments.
Express
will continue to operate under the same brand name and is expected to remain
headquartered in its current location in Columbus, Ohio. Express’
2006 net sales were $1.7 billion, and it currently operates 624 store
locations.
Limited
Stores
The
company also announced that it has signed a definitive agreement to transfer
a
75 percent ownership interest in its Limited Stores business to affiliates
of
Sun Capital Partners. In exchange, Sun Capital Partners will
contribute $50 million of equity capital into the business and will arrange
for
a $75 million credit facility. The transaction is expected to close
within the next 30 days and is subject to customary conditions. Limited Brands
will receive no cash proceeds and expects to record an after-tax loss of
approximately $42 million on the transaction, subject to post-closing
adjustments.
Limited
Stores will continue to operate under the same brand name, and it will remain
headquartered in its current location in Columbus, Ohio. Limited Brands will
provide transitional services, including sourcing and production through
its
Mast business. Limited Stores’ business includes 251 stores and 2006 net sales
were $493 million.
FINANCIAL
ADVISORS
Banc
of
America Securities LLC acted as financial advisor to Limited Brands in
connection with the transactions involving Express and Limited
Stores.
ABOUT
LIMITED BRANDS:
Limited
Brands, through Victoria’s Secret, Bath & Body Works, C.O. Bigelow, Limited
Stores, La Senza, White Barn Candle Co., Henri Bendel and Diva London, presently
operates 3,140 specialty stores. The company’s products are also
available online at www.VictoriasSecret.com,
www.BathandBodyWorks.com and www.LaSenza.com.
ABOUT
GOLDEN GATE CAPITAL:
Golden
Gate Capital is a private equity firm with over $3.4 billion of capital under
management dedicated to investing in change-intensive opportunities. The
firm's
charter is to partner with world-class management teams to make equity
investments in situations where there is a demonstrable opportunity to
significantly enhance a company's value. The principals of Golden Gate Capital
have a long and successful history of investing with management partners
across
a wide range of industries and transaction types. For more information, please
visit www.goldengatecap.com.
ABOUT
SUN CAPITAL PARTNERS, INC.:
Sun
Capital Partners, Inc. is a leading private investment firm focused on leveraged
buyouts, equity, debt, and other investments in market-leading companies
that
can benefit from its in-house operating professionals and experience. Sun
Capital affiliates have invested in and managed more than 155 companies
worldwide with combined sales in excess of $35.0 billion since Sun Capital’s
inception in 1995. Sun Capital has offices in Boca Raton, Los Angeles, and
New
York, as well as affiliates with offices in London, Tokyo, and Shenzhen.
For
more information, please visit www:SunCapPart.com.
Safe
Harbor Statement Under the Private Securities Litigation Reform Act of
1995
The
Company cautions that any forward-looking statements (as such term is defined
in
the Private Securities Litigation Reform Act of 1995) contained in this press
release or made by the Company or management of the Company involve risks
and
uncertainties and are subject to change based on various important factors,
many
of which are beyond our control. Accordingly, the Company’s future performance
and financial results may differ materially from those expressed or implied
in
any such forward-looking statements. Words such as “estimate,” “project,”
“plan,” “believe,” “expect,” “anticipate,” “intend,” “planned,” “potential” and
similar expressions may identify forward-looking statements. The following
factors, among others, in some cases have affected and in the future could
affect the Company’s financial performance and actual results and could cause
actual results to differ materially from those expressed or implied in any
forward-looking statements included in this press release or otherwise made
by
the Company or management: risks associated with general economic conditions,
consumer confidence and consumer spending patterns; the potential impact
of
national and international security concerns on the retail environment,
including any possible military action, terrorist attacks or other hostilities;
risks associated with the seasonality of the Company’s business; risks
associated with the highly competitive nature of the retail industry generally
and the segments in which we operate particularly; risks related to consumer
acceptance of the Company’s products and the Company’s ability to keep up with
fashion trends, develop new merchandise, launch new product lines successfully,
offer products at the appropriate price points and enhance the Company’s brand
image; risks associated with the Company’s ability to retain, hire and train key
personnel and management; risks associated with the possible inability of
the
Company’s manufacturers to deliver products in a timely manner or meet quality
standards; risks associated with the Company’s reliance on foreign sources of
production, including risks related to the disruption of imports by labor
disputes, risks related to political instability, risks associated with legal
and regulatory matters, risks related to duties, taxes, other charges and
quotas
on imports, risks related to local business practices, potential delays or
disruptions in shipping and related pricing impacts and political issues
and
risks related to currency and exchange rates; risks associated with the
dependence on a high volume of mall traffic and the possible lack of
availability of suitable store locations on appropriate terms; risks associated
with labor shortages or increased labor costs; risks associated with increases
in the costs of mailing, paper and printing; risks associated with our ability
to service any debt we incur from time to time as well as the requirements
the
agreements related to such debt impose upon us; risks associated with the
Company’s reliance on information technology, including risks related to the
implementation of new information technology systems and risks related to
utilizing third parties to provide information technology services; risks
associated with severe weather conditions, natural disasters or health hazards;
risks associated with rising energy costs; risks related to the announced
Express transaction or potential strategic options for Limited Stores; and
risks
associated with independent licensees. The Company is not under any obligation
and does not intend to make publicly available any update or other revisions
to
any of the forward-looking statements contained in this press release to
reflect
circumstances existing after the date of this report or to reflect the
occurrence of future events even if experience or future events make it clear
that any expected results expressed or implied by those forward-looking
statements will not be realized.
For
further information, please contact:
Limited
Brands:
Tammy
Roberts Myers
(614)
415-7072
extcomm@limitedbrands.com
Golden
Gate Capital:
Joelle
Kenealey
Coltrin
& Associates
(650)
373-2005
Sun
Capital Partners:
Aaron
Wolfe
(561)
394-0550