Bed Bath & Beyond Will Buy Cost Plus
On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Mergers & Acquisitions on Wednesday, May 23, 2012.
In a recently announced business move, Bed Bath & Beyond Inc will acquire local California retailer Cost Plus Inc. Apparently, Bed Bath & Beyond and Cost Plus have been working together for over a year testing out a specialty food department in some of the Bed Bath & Beyond stores. The success of their collaboration led to the two corporations mutually agreeing to the business structure change. In this acquisition, Bed Bath & Beyond will purchase Cost Plus Inc.
Oakland-based Cost Plus began in 1958 as Cost Plus World Market in San Diego. It currently operates stores under the names World Market and World Market Cost Plus. It has expanded to 259 stores around the world. Bed Bath & Beyond opened in 1971 and has over 1,000 stores worldwide, in addition to stores under several other names.
Concern over discounters and online retailers prompted the companies to work together. The merger is expected to benefit both companies. It will allow Bed Bath & Beyond to expand its specialty food and beverage department. In turn, California's Cost Plus will benefit from its new affiliation with a larger capital structure. Both companies, as well as analysts, agree that the merge is a good one.
The business merger was approved unanimously by the boards of both companies. Bed Bath & Beyond has agreed to pay approximately $459 million to acquire Cost Plus. They will pay $22 per share. The cash transaction is expected to take place by the end of August. The CEO of Cost Plus has indicated no stores will close and no layoffs will result from the business merger.
Source: Inside Bay Area, "Bed Bath & Beyond to buy Cost Plus for $495M," Mae Anderson, May 9, 2012