Clearance Sale on Restoration Hardware

By Staff -- Home Textiles Today, 1/28/2008 12:00:00 AM

Corte Madera, Calif. —

As recently as Dec. 17, specialty retailer Restoration Hardware (RH) was the target of an acquisition bid of $6.75 per share by Sears Holdings Corp. and an earlier bid of $6.70 per share by Catterton Partners — but in an example of the current stress on retail stocks, RH last week entered into an amended agreement with Catterton to accept a bid of $4.50 per share.

RH said the "total equity value of the transaction is approximately $179 million," down from the roughly $260 million value of the bid by Sears. RH noted that the price is still "a 68% premium" on the closing price of its shares on Nov. 7, the last trading day prior to initial proposed merger announcement.

The price of RH shares shot up from below $3 to more than $6 in early November, where it remained until early January. It has since fallen to roughly $4 per share.

RH will solicit proposals from third parties for an additional period of 35 days, concluding February 28. The amendment triggers another extension of the closing date for the merger to April 30 – June 30, 2008.

The Catterton private investment group also has provided a $25 million subordinated loan to Restoration Hardware for working capital purposes, which RH reports "is not contingent on the closing of the acquisition and has been funded."