Pier 1 responds to Cost Plus rejection

FORT WORTH, Texas Pier 1 Imports issued the following statement in response to the announcement by Cost Plus, regarding Pier 1 Imports’ proposal to acquire all the outstanding shares of Cost Plus.

“We are disappointed in the Cost Plus board’s recommendation, which fails to recognize the significant value inherent in a combination of our two companies,” said Alex Smith, president and ceo of Pier 1 Imports. “Our strategic stock-for-stock proposal is extremely compelling, and we believe that it would create significant value for the stakeholders of both companies. We are surprised that the Cost Plus Board determined that our proposal was not in the best interests of the Cost Plus shareholders – given that the Cost Plus Board and management have made no effort to discuss with us the potential and benefits of a mutually acceptable transaction. In addition, as originally outlined, our proposal is subject to only limited conditions that are customary for transactions of this type, which are confirmatory due diligence, the negotiation of a definitive acquisition agreement and the receipt of all necessary shareholder and regulatory approvals. Nevertheless, we intend to work directly with the shareholders of Cost Plus to make this transaction a reality.”

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.