Sears asked to participate in same process as other interested parties

CORTE MADERA, Calif. The independent committee of Restoration Hardware's board of directors announced today that if Sears will agree to execute the customary confidentiality and standstill agreement on substantially the same terms that other parties have signed, it would provide Sears with the confidential information it requested.

"While Sears has announced its willingness to sign a confidentiality agreement, there is no agreement on terms and, to date, instead of agreeing to the standstill agreement to which other interested parties have agreed, Sears has proposed to reserve the right to launch a tender offer outside the process," the independent committee said in a statement today.

According to the Restoration Hardware committee, the company is pleased with Sears offer at $6.75 per share, adding that it is a great improvement over the prior proposal at $4.00 per share. At the same time, the committee stated that it believes that stockholder value will be maximized if Sears participates inside the process with other interested parties.

"Sears is an American icon," said Ray Hemmig, chairman of the independent committee. "We are flattered that it is interested in learning more about our company. We welcome its participation in the process along with the other interested parties. However, the committee is firmly committed to a fair process that will yield the best results for all stockholders and believes that process is best served through all parties agreeing to the proposed standstill terms without preferential treatment of one party over another."

Sears Holdings reported in an SEC filing Monday that it had sent a letter to the special committee of the board of directors of Restoration Hardware, in which it proposed a tender offer to purchase the company’s shares for $6.75 per share, and that it would contemplate entering into a merger agreement. In the letter, Sears also sought to enter into a confidentiality agreement with Restoration Hardware.

According to Sears Holdings, after sending the Nov. 23 letter, its representatives, along with representatives from Restoration Hardware met to discuss Sears’ proposal. On Nov. 25, 2007, the special committee of Restoration Hardware informed Sears Holdings that it was unwilling to enter into a confidentiality agreement providing for the superior tender offer exception sought by Sears Holdings.