Plus buy bed bath & beyond cost for $495 M

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NEW YORK — home were chain bed bath & beyond Inc has agreed to, smaller rival purchase cost plus Inc for about $495 million in bar, bed bath access to new markets, customers, and other unique products.

The deal values Oakland, California based cost plus to $22 per share, one bonus from 22 per cent to the closing price of $17.99 on Tuesday on the NASDAQ.

In December 2010 bed bath & beyond had already begun testing a cost plus speciality food section in a handful of stores in major markets like New York and New Jersey.

At the time had analysts as JPMorgan by Christopher Horvers said that the test for a greater cooperation between the two chains, especially since bed bath, which products could result in rich bed linen, cutlery, started further implementation specialties in recent years.

"For bed bath & beyond it offers an additional growth vehicle."Growth is very slow in the core concept of bed bath & beyond, said BB & T capital markets analyst Anthony Chukumba on Wednesday.

"Cost plus is a unique concept with a dedicated customer base in California, and there is room to grow."

He added: "the interesting at cost plus is on the one hand, they have a pretty eclectic home furnishings from around the world." On the other hand, they have this unique consumables business... like chocolate from Germany and... a great wine shop. "

The smaller chain currently has about 250 shops, has the potential of its business during which time to double Chukumba said, adding that the "fairly high degree of familiarity" between the two companies was a bonus.

The companies expect that business in bed bath & beyond of the second quarter to close and it will be financed entirely bath & beyond the Union, New Jersey-based bed with available money.

Red mountain Capital Partners LLC and Stephens Investment Holdings LLC - the two largest shareholders of costs plus - have already agreed, commit their shares to bed bath, call accounting for 26 per cent cost plus, said the companies in the Joint Declaration.

Bed the deal bad expected 2012 results to. It remains high single-digit to a low double-digit percentage in 2012 to the result increase.

Cost plus shares rose nearly 22 percent to its highest level for almost seven years on news of the deal. They were late morning by 21.6 per cent to $21.88 on Wednesday from an earlier high at $21.95. By 1.3 percent to $69.14 were shares of bed bath & beyond.

Goldman Sachs & co is acting as financial advisor to bed bath & beyond, while Proskauer Rose LLP is acting as legal advisor of the larger retailers.

Peter j. Solomon company acts as financial advisor cost plus. Skadden, Arps, Slate, Meagher & Flom LLP serves as legal counsel for the California based chain.

Copyright 2011 Thomson Reuters.