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L Brands Rises on Outline of Plan to Spin Off Victoria's Secret

L Brands holders will receive one Victoria’s Secret share for every three shares of the parent they hold as of July 22.
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L Brands  (LB) - Get L Brands, Inc. (LB) Report shares rose Monday after the owner of Bath & Body Works, Victoria’s Secret and Pink said it would spin off Victoria’s Secret to the parent's holders.

Under the terms, holders of L Brands will receive one Victoria’s Secret share for every three shares of the parent they hold as of July 22.

The new independent company, named Victoria’s Secret, will include Pink, too.

L Brands is changing its name to Bath & Body Works and changing its ticker to BBWI. Victoria’s Secret will trade on the New York Stock Exchange with the ticker VSCO.

L Brands’ common stock is expected to start trading under the new stock symbol Aug. 3. L Brands expects Victoria’s Secret’s common to begin regular trading on the same date.

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Shares of L Brands, Columbus, Ohio, recently traded at $77.37, up 5.3%. The stock on Monday touched a 52-week high $77.50. The shares have soared 64% over the past six months amid investor and analyst enthusiasm for the breakup.

L Brands said it expected to receive an opinion from its tax adviser that the spinoff of Victoria's Secret will be tax-free to holders.

The deal is subject to, among other conditions, the Securities and Exchange Commission declaring the Victoria's Secret registration effective.

TheStreet.com Founder Jim Cramer discussed the pros and cons of the spinoff, after it was announced in May.

Last month, L Brands named a majority-women’s board for Victoria’s Secret. The Victoria’s Secret board consists of seven directors, six of whom are independent and six of whom are women.

The seven directors include Donna James, Irene Chang Britt, Sarah Davis, Jacqueline Hernández, Lauren Peters, Anne Sheehan and Martin Waters.