Sears still seeking Restoration

Jan 01, 2008 10:30 PM  By

It looks like Sears Holdings Corp. is gaining ground in its quest to acquire Restoration Hardware for $269 million. Restoration Hardware at press time had just signed a confidentiality agreement granting Sears access to nonpublic information about the home furnishings cataloger/retailer. Sears had been after this data for months.

Restoration’s board of directors solicited alternative proposals during a designated 35-day period.

Hoffman Estates, IL-based Sears, the parent company of retailers Sears and Kmart and apparel cataloger Lands’ End, had submitted an offer of $4 a share for Restoration Hardware in late October. This prompted Restoration on Nov. 8 to agree to accept a $267 million offer — $6.70 a share — led by an affiliate of private-equity firm Catterton Partners. But as part of the deal, Restoration’s board agreed to solicit alternative proposals for the company for a 35-day period that ended Dec. 13.

Sears then bought a 13.7% stake in the home decor merchant: It paid $30.2 million for 5.3 million shares of Restoration Hardware, according to a Nov. 19 Securities and Exchange Commission filing. And on Nov. 26 Sears upped its offer to $6.75 a share in cash to buy Restoration, which includes about 100 stores, catalogs, and a Website.