Cost Plus Rejects Pier One; Says Bid Is 'Ill-Timed'
Cost Plus rejected Pier 1 Importsoffer to acquire the furnishings retailer in a stock deal, saying Monday that the bid was "ill-timed."
"Your proposal to combine our operations is not attractive from either a financial or a strategic perspective," Cost Plus said in a letter to Pier 1. "It is both distracting and ill-timed given the difficult retail environment and the progress we have made investing in and improving our business."
On June 9, home-decor retailer Pier 1 said it offered to buy fellow home furnishings retailer Cost Plus in a stock deal that was valued at the time at $88.4 million.
Pier 1 said it would issue 0.6 shares of its common stock for each share of Cost Plus, which had 22.1 million shares outstanding as of April 14.
Based on the stocks' June 6 closing prices, the offer valued Cost Plus at about $4 per share, which at the time was a premium of 31 percent.
Cost Plus shares closed on Friday at $3.34.
Some analysts gave the deal a thumbs-down, saying acquiring Cost Plus, which reported a quarterly loss last month, would distract Pier 1, which is in the process of turning its business around.
Cost Plus, which also sells exotic food and beverages at its Cost Plus World Market stores, said it had significant liquidity to pursue its business objectives.