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Pier 1 Imports makes public details of its stock-for-stock offer for Cost Plus
By Lisa Kerner
Charlotte, N.C., June 9 - Pier 1 Imports, Inc. is interested in acquiring Cost Plus, Inc. in a stock-for-stock transaction that could close in the third quarter of 2008.
Terms of the proposal were outlined in a June 6 letter to the Cost Plus board of directors, made public after Cost Plus failed to meet with Pier 1 Imports, a Fort Worth, Texas, specialty retailer, as requested before the start of business on June 9.
Pier 1 Imports said it would issue 0.6 shares of its common stock for each share of Cost Plus common stock. Based on the closing prices of Pier 1 Imports and Cost Plus on June 6, the offer price is valued at $4 per share.
The offer price is a 34% premium over the average closing price of Cost Plus shares for the last 30 trading days.
Pier 1 Imports president and chief executive officer Alex W. Smith called the offer "extremely compelling."
"Given our similar customer bases and broadly similar business models, but distinct market positions, we believe Cost Plus is an excellent fit with Pier 1 Imports," Smith added.
Smith asked Cost Plus to terminate its shareholder rights plan that expires June 30 and to refrain from renewing or extending the plan or adopting any other rights plan or poison pill.
In his letter to Cost Plus, Smith estimated that Pier 1 Imports' common shareholders own approximately 62% of Cost Plus' outstanding shares.
Cost Plus, an Oakland, Calif.-based specialty retailer, confirmed receipt of Pier 1 Imports' unsolicited, non-binding, "highly conditional proposal" and said its board will review it "in due course," according to a statement released by Cost Plus.
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