Clearance sale on Restoration Hardware
January 25, 2008,
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 yesterday entered into an amended agreement with Catterton to accept a bid of $4.50 per share.
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 Feb. 28.
The amendment triggers another extension of the closing date for the merger to April 30 – June 30, 2008, and “changes the definition of material adverse effect to increase the likelihood that the transaction will close if the company experiences weakness in its operating results.”
The Catterton private investment group 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.”
Catterton also owns a controlling interest in foam bedding suppliers Sleep Innovations, Outback Steakhouse and Breyers Yogurt Company, among others.