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Cost Plus rejects offer

June 17, 2008|From Bloomberg News

Cost Plus Inc. rejected an unsolicited $79-million takeover offer from larger Pier 1 Imports Inc., saying the bid for its 296 home-furnishing stores wasn't "attractive."

The June 6 stock offer from Fort Worth-based Pier 1, initially worth $4 a share, was rejected unanimously by its board, Oakland-based Cost Plus said Monday. Pier 1 climbed 7.6% in New York trading after the news.

Pier 1, the biggest U.S. retailer of imported furniture, closed 79 stores and sold its headquarters as consumers grappling with record gasoline costs trimmed spending. The reduced expenses allowed Pier 1 to report its first quarterly profit in three years on April 10. Cost Plus has posted losses in eight of the last nine quarters.

Pier 1 Chief Executive Alex Smith said in a statement that he was "disappointed" by the rejection.

Pier 1 shares rose 42 cents to $5.97. Cost Plus shares rose 12 cents, or 3.6%, to $3.46.

Pier 1 is offering 0.6 of a share for Cost Plus stock, valuing the retailer at $3.58 a share. The bid, originally worth $88 million, is 17% more than Cost Plus' closing price June 6.

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