Cost Plus rejects Pier 1's merger offer

OAKLAND, Calif. Cost Plus reported that its board of directors has announced that its board of directors has unanimously rejected the Pier 1 Imports' unsolicited stock-for-stock merger proposal it received on June 6.

In a letter sent to Pier 1, Cost Plus' board of directors wrote,  "Your proposal to combine our operations is not attractive from either a financial or a strategic perspective. It is both distracting and ill-timed given the difficult retail environment and the progress we have made investing in and improving our business. We believe that our shareholders want us to remain focused on our business and provide superior operational execution."

On June 9, Pier 1 Imports said it was looking to acquire all of the outstanding shares of Cost Plus common stock for $4.00 per share. The company said it sent a letter to Cost Plus detailing the proposal and said it believed the transaction could be finished by the third quarter of 2008.