CORTE MADERA, Calif.–Home specialty retailer Restoration Hardware has amended its merger agreement with an affiliate of private-equity firm Catterton Partners.
Under the terms of the amended merger agreement, all of the outstanding shares of Restoration Hardware will be acquired for a price per share equal to $4.50 in cash. The $4.50 per share cash consideration reflects a 68 percent premium to the closing price of Restoration Hardware common stock on Nov. 7, 2007, the last trading day before the announcement of the merger agreement.
The total equity value of the transaction is roughly $179 million.
The amendment also moves the outside termination date for the merger agreement from April 30 to June 30 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,” Restoration Hardware said in a statement.
Through its affiliates, Catterton Partners has provided a $25 million subordinated loan to Restoration Hardware for working capital purposes. “The amended merger agreement today comes as the company and the home-related retail sector face increased pressure,” according to the statement. “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 Nov. 7, 2007, and our current stock price while providing greater certainty of closure.”