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Restoration Hardware Accepts Lower Bid

Sears May Still Be Interested

By Staff -- Gifts and Dec, 1/29/2008 9:17:00 AM

Corte Madera, CA — Equity firm Catterton Partners, Greenwich, CT, which had offered $6.70 per share for home chain Restoration Hardware in November 2007, dropped its management-led buyout bid to $4.50 per share, or about $179 million. The lower price reflects falling performance: Restoration saw a widening third quarter loss and a one percent loss during the holidays, compared to a 22 percent increase a year ago.

Restoration agreed to the revised deal, which also extends the deadline for canceling the takeover to June 30 from April 30. The terms were amended to make it harder for Catterton to abandon the deal if Restoration's operating results weaken, according to The Wall Street Journal. Catterton also provided Restoration with a $25 million loan for working capital.

In spite of the agreement, Sears, which owns a 13.63 percent stake in Restoration, may still be interested in making a counter offer. (Sears had offered $6.75 a share for the company in November 2007.) According to a January 28 Securities and Exchange Commission filing, Sears is reviewing the amended terms of the buyout to understand the implications for any future deal.

However other factors besides Catterton’s new deal may influence Sears’ decision, since the company just saw the departure of CEO Aylwin B. Lewis and appointment of W. Bruce Johnson as interim CEO.

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Don't count Restoration Hardware down for the count!
Gary Freidman is one smart guy.
He will make this company appen1! just give hime time!

Gretchen California - 2008-02-04 23:14:00 EST

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