CLIFTON, N.J. (AP) — Linens N Things Inc., a top retailer of bedding, towels and home goods, agreed Tuesday to be acquired by an investment firm in a deal worth about $1.3 billion.
The deal to be acquired by a new company formed by privately held Apollo Management LP comes as Linens N Things, the nation's No. 2 home goods chain behind Bed Bath & Beyond, is dealing with falling profits and sales amid increased competition from retailers offering more trendy home goods merchandise.
William Giles, chief financial officer at Clifton-based Linens N Things, said the acquisition won't cause changes obvious to shoppers or alter company plans to open 30 more stores next year.
"We think that there's significant opportunity for us to continue to grow our business," Giles said in an interview. "We think this acquisition will allow us to accomplish that."
Under the agreement, Linens N Things shareholders will receive $28 in cash for each share they own, a 6 percent premium to the stock's closing price of $26.40 on Monday. Shares fell 44 cents, or 1.7 percent, to $25.96 in trading on the New York Stock Exchange.
Kurt Barnard, president of Barnard's Retail Forecasting in Nutley, N.J., noted that Linens N Things, which has long tried to imitate Bed Bath & Beyond, has struggled for at least the last five years. But with recent stepped-up competition from other players, the retailer is now finding its troubles are worsening.