Limited Woos Intimate Brands

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.