Restoration Hardware Enters Into Amendment to Merger Agreement With Catterton Partners
24 Janvier 2008 - 10:29PM
PR Newswire (US)
CORTE MADERA, Calif., Jan. 24 /PRNewswire-FirstCall/ -- Restoration
Hardware, Inc. (NASDAQ:RSTO) today announced that it has entered
into an amendment to its previously announced merger agreement with
certain affiliates of Catterton Partners. Under the terms of the
amended merger agreement, all of the outstanding shares of
Restoration Hardware, other than those exchanged by certain
stockholders participating with Catterton Partners in the
transaction, will be acquired for a price per share equal to $4.50
in cash. The $4.50 per share cash consideration represents a 68%
premium to the closing price of Restoration Hardware common stock
on November 7, 2007, the last trading day prior to the initial
announcement of the original merger agreement. The total equity
value of the transaction is approximately $179 million. The
amendment also extends the outside termination date for the merger
agreement from April 30, 2008 to June 30, 2008 and changes the
definition of material adverse effect to increase the likelihood
that the transaction will close if the Company experiences weakness
in its operating results. Additionally, in connection with the
execution of the amendment, Catterton Partners, through its
affiliates, has provided a $25 million subordinated loan to
Restoration Hardware for working capital purposes. This loan is not
contingent on the closing of the acquisition and has been funded.
Restoration Hardware commented: "The amended merger agreement today
comes as the Company and the home related retail sector face
increased pressure. The subordinated loan provides the Company with
substantially enhanced near-term liquidity to operate in the
current environment. The amended merger agreement provides our
shareholders a substantial premium to both the unaffected stock
price on November 7, 2007, and our current stock price while
providing greater certainty of closure." The amended merger
agreement was negotiated on behalf of Restoration Hardware by a
committee of the Board of Directors composed entirely of
independent directors, with the assistance of independent financial
and legal advisors. The Board of Directors of Restoration Hardware,
on the unanimous recommendation of the independent committee, has
approved the amended merger agreement and recommends that
Restoration Hardware's stockholders adopt the amended merger
agreement. In accordance with the amended merger agreement, the
committee of independent directors, with the assistance of its
advisors, will solicit proposals from third parties for an
additional period of 35 days concluding February 28, 2008. The
independent committee, with the assistance of its advisors, intends
to actively solicit superior proposals during this period. This
additional time period for competing proposals will allow Sears or
other third parties that may have an interest to make an offer to
acquire the Company. There is no assurance that any third party,
including Sears, will pursue a competing proposal to acquire the
Company or that the solicitation of superior proposals will result
in an alternative transaction. The transaction is subject to (i)
the approval of holders of two-thirds of the outstanding shares of
Restoration Hardware common stock pursuant to the certificate of
incorporation of Restoration Hardware, (ii) the approval of holders
of a majority of the shares voting at the special meeting that are
held by stockholders that have not made an acquisition proposal and
are not participating in the transaction, and (iii) other closing
conditions, including the receipt of regulatory approvals. The
transaction is not subject to any financing condition (other than
the performance of the investment and share contribution
commitments made by the participating institutional stockholders
and the Company's Chief Executive Officer, Mr. Friedman) and is
expected to close near the end of the first quarter of 2008. About
Restoration Hardware Restoration Hardware, Inc. is a specialty
retailer of high quality home furnishings, bath fixtures and
bathware, functional and decorative hardware, gifts and related
merchandise that reflects the Company's classic and authentic
American point of view. Restoration Hardware, Inc. sells its
merchandise offering through its retail stores, catalog
(800-762-1005) and on-line at http://www.restorationhardware.com/.
The Company currently operates 102 retail stores and nine outlet
stores in 30 states, the District of Columbia and Canada. About
Catterton Partners With more than $2 billion under management,
Catterton Partners is a leading private equity firm in the U.S.
focused exclusively on the consumer industry. Since its founding in
1990, Catterton has leveraged its investment capital, strategic and
operating skills, and network of industry contacts to establish one
of the strongest investment track records in the consumer industry.
Catterton invests in all major consumer segments, including Food
and Beverage, Retail and Restaurants, Consumer Products and
Services, and Media and Marketing Services. Catterton has led
investments in companies such as Breyers(R) Yogurt Company,
Wellness Pet Food, Liberty Safe, Build-A-Bear Workshop, Cheddar's
Restaurant Holdings Inc., Outback Steakhouse, P.F. Chang's China
Bistro, Baja Fresh Mexican Grill, Frederic Fekkai, Kettle Foods,
Farley's and Sathers Candy Co., and Odwalla, Inc. More information
about the firm can be found at http://www.cpequity.com/. Safe
Harbor Statement under the Private Securities Litigation Reform Act
of 1995: This release contains forward-looking statements that
involve known and unknown risks. Such forward-looking statements
include, without limitation, statements concerning the expected
timing of the closing of the merger and statements containing words
such as "expects" and words of similar import or statements of
management's opinion. There are a number of risks and uncertainties
that could cause actual results to differ materially from these
forward-looking statements, including the following: (1) the
Company may be unable to obtain stockholder approval required for
the merger agreement; (2) the Company may be unable to obtain
regulatory approvals required for the transactions contemplated by
the merger agreement; (3) conditions to the closing of the merger
agreement may not be satisfied; (4) the transaction may involve
unexpected costs, unexpected liabilities or unexpected delays; (5)
the Company may be adversely affected by the announcement of the
proposed merger agreement or amendment thereto with Catterton
Partners and the related process of soliciting alternative
transactions; (6) the Company may be adversely affected by the
uncertainty relating to the pending merger or the possibility of
another transaction involving the Company, including potential
difficulties in employee retention, disruption in current plans or
operations and diversion of management's attention from ongoing
business operations; and (7) the Company may be adversely affected
by other economic, business, and/or competitive factors. Additional
factors that may affect the future results of the Company are set
forth in its filings with the Securities and Exchange Commission,
including its recent filings on Forms 10-K, 10-Q and 8-K,
including, but not limited to, those described in the Company's
Form 10-Q for the quarter ended November 3, 2007, in Part I, Item 2
thereof ("Management's Discussion and Analysis of Financial
Condition and Results of Operations"), in Part I, Item 4 thereof
("Controls and Procedures"), and in Part II, Item 1A thereof ("Risk
Factors"). Unless required by law, the Company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. Information about the Previously Announced Merger and
Where to Find It In connection with the proposed merger, the
Company will file a proxy statement with the Securities and
Exchange Commission (the "SEC"). Investors and security holders are
strongly advised to read the proxy statement when it becomes
available because it will contain important information about the
merger and the parties to the merger. Investors and security
holders may obtain a free copy of the proxy statement (when
available) and other documents filed by the Company at the SEC
website at http://www.sec.gov/. The proxy statement and other
documents also may be obtained for free from the Company by
directing such request to Chris Newman, Chief Financial Officer and
Secretary, telephone: (415) 945-4530, or on the company's website
at http://www.restorationhardware.com/. The Company and its
directors, executive officers and other members of its management
and employees may be deemed participants in the solicitation of
proxies from its stockholders in connection with the proposed
merger. Information concerning the interests of the Company's
participants in the solicitation, which may, in some cases, be
different than those of stockholders generally, is set forth in the
Company's proxy statements and Annual Reports on Form 10-K,
previously filed with the SEC, and will be set forth in the proxy
statement relating to the merger when it becomes available. Each of
these documents may be obtained for free at the SEC website at
http://www.sec.gov/ or from the Company by directing such request
to Chris Newman, Chief Financial Officer and Secretary, telephone:
(415) 945-4530, or on the company's website at
http://www.restorationhardware.com/. Contacts Investors: The
Consumer Group Christine Greany (858) 523-1732 Media: Sitrick and
Company Michael Sitrick / Jason Booth (310) 788-2850 Lance Ignon
(415) 793-8851 Catterton Partners Eric Brielmann / Andrea Salas
Joele Frank, Wilkinson Brimmer Katcher (212) 355-4449 DATASOURCE:
Restoration Hardware, Inc. CONTACT: Investors, Christine Greany of
The Consumer Group, +1-858-523-1732, for Restoration Hardware,
Inc.; or Media, Michael Sitrick, or Jason Booth, +1-310-788-2850,
or Lance Ignon, +1-415-793-8851, all of Sitrick and Company, for
Restoration Hardware, Inc.; or Eric Brielmann or Andrea Salas, both
of Joele Frank, Wilkinson Brimmer Katcher, +1-212-355-4449, for
Catterton Partners Web site: http://www.restorationhardware.com/
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