Specialty retailer Restoration Hardware has rejected a $4.55-per-share acquisition bid by Sears Holdings in favor of an offer of $4.50-per-share by investment group Catterton Partners. Restoration Hardware said the Sears offer came with “significant uncertainties” as its reason for favoring Catterton, adding the five cent difference was not "reasonably likely to result in a superior proposal.”
Sears had submitted its offer on Thursday, Feb. 28, the final day of the 35-day period for competing offers Restoration Hardware had set. The $179 million buyout deal from Catterton has been in the works since late 2007.
However, the terms have changed significantly since the process was started in November -- at that time Catterton bid $6.70 for the retailer, while Sears Holdings countered with $6.75. That was before Restoration Hardware’s sales showed a slowdown and its stock floundered.
“With the expiration of the ‘go-shop’ period, Restoration Hardware is continuing to work with Catterton Partners to complete the merger in a timely manner,” said a statement from Restoration Hardware.
In mid-January, Restoration Hardware revealed sluggish holiday sales. The company said net revenue took a small hit, falling 1 percent to $171.5 million from $173.2 million in the same nine-week period last year.