Restoration Hardware will hold Sears to same confidentiality agreement as other interested parties

By Lisa Kerner

Charlotte, N.C., Nov. 27 - Restoration Hardware, Inc. said it would be "pleased" to give Sears Holdings Corp. the information it requested if Sears signs the same customary confidentiality and standstill agreement on "substantially" the same terms as other interested parties.

While Sears has announced its willingness to sign a confidentiality agreement, there is no agreement on terms. In addition, Sears wanted to reserve the right to launch a tender offer outside the process, the Restoration Hardware board's independent committee of directors said in a news release.

Sears' current proposal of $6.75 per share is a "vast improvement over its prior proposal at $4.00 per share," according to the Restoration Hardware release.

Independent committee chairman Ray Hemmig said that while Sears' interest in Restoration Hardware is flattering, the committee "is firmly committed to a fair process that will yield the best results for all stockholders and believes that process is best served through all parties agreeing to the proposed standstill terms without preferential treatment of one party over another."

Restoration Hardware announced a merger agreement with Catterton Partners on Nov. 8 that included a go-shop period ending Dec. 13. Catterton agreed to acquire Restoration Hardware for $6.70 cash per share in deal valued at some $267 million. The deal includes a $10.68 million termination fee.

It was previously reported that Sears would consider "entering into a merger agreement on terms substantially similar to the current merger agreement" with Catterton Partners. However, Sears' agreement would be modified to accommodate a tender offer structure and would include "a lower, more reasonable break-up fee."

Sears owns 5,307,832 shares, or 13.67%, of the Corte Madera, Calif.-based specialty retailer's outstanding stock.

Sears Holdings operates as a broad-line retailer through three segments: Kmart, Sears Domestic, and Sears Canada. The company is based in Hoffman Estates, Ill.

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