Make your home page

Victoria’s Secret deal to go private hits a roadblock

NEW YORK, NY - MARCH 24: A sign on The Victoria's Secret store notifies closure due to the coronavirus on March 24, 2020 in New York City. New York City has about a third of the nations confirmed coronavirus (COVID-19) cases, making it the epicenter of the outbreak in the United States. (Photo by Eduardo Munoz Alvarez/Getty Images)

(CNN) — Sycamore Partners wants to terminate its plan to buy a majority stake in Victoria’s Secret from L Brands two months after the $525 million deal was reached.

The private equity firm informed L Brands of its decision to pull out of the deal Wednesday, and it filed a lawsuit in Delaware court to validate the termination of the agreement. The shocking news sent L Brands’ stock plunging 25%.

L Brands said in a statement that Sycamore’s termination was “invalid” and the company will “vigorously defend the lawsuit and pursue all legal remedies to enforce its contractual rights.”

In mid-March, L Brands temporarily closed its retail stores, including Victoria’s Secret and Bath and Body Works, because of the coronavirus pandemic. Sycamore Partners argues those changes were in violation of the transaction, according to the Wall Street Journal.

L Brands and Sycamore Partners came to an agreement to split control of Victoria’s Secret in February. The private equity firm was buying a 55% stake, while L Brands would retain control of the remaining 45%. Victoria’s Secret was set to be spun off into a fully private company.

Leslie Wexner, the 82-year-old billionaire that has run L Brands for several decades, was set to leave his position as CEO and chairman as part of the transaction.

Sycamore Partners didn’t immediately return CNN Business’ request for comment.