Bed Bath & Beyond to Buy Cost Plus

May 8, 2012  by in UnCategorized   

By Home Furnishings Business in Acquisition on May 9, 2012

Home retailer Bed Bath & Beyond (NASDAQ: BBBY) will acquire specialty home décor retailer Cost Plus (NASDAQ: CPWM) for more than $517 million.

Under the agreement, Bed Bath & Beyond will buy all outstanding shares of Cost Plus common stock at a price of $22 per share, followed by a merger in which all shareholders that have not tendered would receive the same consideration.

The boards of directors of both companies have approved the terms, and the acquisition is expected to close during Bed Bath & Beyond's fiscal second quarter. 

The deal will be funded by Bed Bath & Beyond with available cash. Bed Bath & Beyond  continues to model completion of its current share repurchase authorization by the end of fiscal 2012, which may be influenced by several factors, including business and market conditions.

A special committee of the Cost Plus board has recommended the transaction following receipt of a fairness opinion from its financial advisor. In addition, Bed Bath & Beyond has entered into agreements with Red Mountain Capital Partners LLC and Stephens Investment Holdings LLC, the two largest shareholders of Cost Plus, Inc. pursuant to which each shareholder has committed to tender all of their shares, which in aggregate comprise about a 26 percent interest in Cost Plus into the offer, subject to certain conditions.

"We are thrilled about the prospects of welcoming the Cost Plus team and their customers and vendors to the Bed Bath & Beyond family," said Steven H. Temares, CEO and member of the board of Bed Bath & Beyond. "Through the combination of the highly talented Cost Plus organization with our own dedicated associates, we expect to be able to do even more for, and with, our collective customers."

Barry J. Feld, CEO of Cost Plus, said the deal will offer immediate value to the retailer's shareholders and employees.

"Our successful merchandising and product collaborations over the last two years have demonstrated that our organizations work well together, and that we can make key contributions to the continued success of the combined company," Feld said.