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DealBook: Bed Bath & Beyond to Buy Cost Plus

Date: 09-May-2012

Bed Bath & Beyond is going shopping.

On Wednesday, the home goods chain announced plans to buy Cost Plus, a domestic retailer with an international flair, for $495 million.

Under the terms of the deal, Bed Bath & Beyond is offering $22 a share in cash for Cost Plus, which is more than 22 percent above the company’s closing price on Tuesday.

“We are thrilled about the prospects of welcoming the Cost Plus team and their customers and vendors to the Bed Bath & Beyond family,” Steven H. Temares, the chief executive, said in a statement. “Through the combination of the highly talented Cost Plus organization with our own dedicated associates, we expect to be able to do even more for, and with, our collective customers.”

The two companies have had close ties for awhile. Cost Plus World Market, which started in San Francisco’s Fisherman’s Wharf and now has 259 locations in the United States, has worked with Bed Bath & Beyond on various initiatives, including a store-within-a-store concept.

“Our successful merchandising and product collaborations over the last two years have demonstrated that our organizations work well together and that we can make key contributions to the continued success of the combined company,” Barry J. Feld, chief executive of Cost Plus, said in a statement.

Two major shareholders, Red Mountain Capital Partners and Stephens Investment Holdings, have already agreed to tender their shares; the two firms collectively own 26 percent of Cost Plus.

Goldman Sachs and Proskauer Rose advised Bed Bath & Beyond, while the Peter J. Solomon Company and Skadden, Arps, Slate, Meagher & Flom worked with Cost Plus.

Copyright 2012 The New York Times Company