NEW YORK, Feb 22 Reuters Billionaire investor Daniel Loeb told retailer Bath Body Works on Wednesday that his hedge fund Third Point plans to launch a board challenge and said the company39;s addition of new directors does not address his concerns about governance, capital allocation and executive pay.

As fiduciaries, we have no choice but to put forth qualified director candidates and give our fellow shareholders the opportunity to elect directors who can hold the stewards of their capital responsible for the decisions they make, Third Point founder Daniel Loeb wrote in a letter to the company39;s board.

A representative for Bath Body works did not immediately respond to a request for comment.

Tensions had been simmering between the two sides for months ever since Third Point announced in December it owned a roughly 6 stake in the specialty retailer, criticized the company39;s high costs and its lagging share price. Third Point also hinted that he might try to push for board seats.

Now, Third Point is following through and announcing its board challenge only hours after Bath Body Works on Tuesday said that it was adding a second new board member, possibly to assuage the hedge fund39;s criticisms.

The move did not appease Loeb and he accused the group of operating in triage mode instead of following best corporate governance practices. He said that the board left him no choice but to mount a proxy fight because his requests to add a shareholder representative to…