Filed under: Deals
Things are getting hostile in the furniture business. That is, Pier 1 Imports (NYSE: PIR) has announced a $4 unsolicited bid for rival Cost Plus (NASDAQ: CPWM). That comes to about $88 million. On news of the deal, Cost Plus’ shares rose 13% to $3.47.
Even though, the folks at Cost Plus are skeptical, calling the deal “highly conditional.” Of course, the board will meet to discuss the proposal.
With the recession and real estate bust, it’s a good bet we’ll see more consolidation in the furniture business. Simply put, it will be a way to cut capacity as well as reduce cost structures.
No doubt, Cost Plus will want to get a higher price, but in light of the challenging environment, that’s probably going to be tough. Besides, Cost Plus and Pier 1 have many common shareholders, who might pressure for a transaction. What’s more, Cost Plus’s “poison pill” will expire on June 30th.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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