Filed under: Management, Engagements, Shareholders, Public or private?
Pier One Inc. (NYSE: PIR) has made an offer to acquire rival Cost Plus, Inc. (NASDAQ: CPWM). Cost Plus confirmed this today. Unfortunately, nether stock is reacting with anything resembling an overwhelming response. It may seem like a game changing deal on the surface.
As far as the terms before any dilution, this would have been a 31% premium for Cost Plus before any dilution metrics come into play. The buyout terms are for 0.6 shares of Pier One for each share of Cost Plus. When you factor in the share drop at Pier One, this looks like a resounding thud.
The problem is that Pier One shares have fallen and therefore lowered the potential buyout price compared to any cash offer buyout deal. With a 16% drop to $5.55 per Pier One share, this works out to a mere $3.33 for Cost Plus.
Continue reading the full summary and analysis from 247WallSt.com.
Jon C. Ogg
Entries (RSS)