Cost Plus: Pier 1 bid ‘distracting and ill-timed’
By Staff -- Home Textiles Today, 6/16/2008 12:05:00 PM
Oakland, Calif. – Calling the June 6 unsolicited acquisition offer by Pier 1 Imports “not attractive,” Cost Plus World Market formally rejected the stock-for-stock bid today.
In today’s letter to Pier 1 management, the Cost Plus board of directors stated, “Your proposal to combine our operations is not attractive from either a financial or a strategic perspective. It is both distracting and ill-timed given the difficult retail environment and the progress we have made investing in and improving our business.”
Cost Plus said its board had unanimously rejected the merger proposal, having determined after careful consideration that it “is not in the best interests of Cost Plus and its shareholders.”
The letter emphasized that “Cost Plus has significant liquidity to pursue its business objectives and to deliver improvement in our core business metrics.” The directors also lauded Cost Plus ceo Barry Feld – whose contract it extended in March – and expressed confidence his team will deliver “sustainable long-term growth and profitability.”
Each chain has been seeking a turnaround; each posted a loss in 2007. Pier 1, with 1,034 stores, recorded a net loss of $96.0 million on sales of $1.5 billion. Cost Plus, which currently operates 296 stores in 33 states, lost $55.5 million on sales of $1.0 billion.
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