Bed Bath & Beyond Inc. (NASDAQ:BBBY) has agreed to acquire smaller rival Cost Plus Inc. (NASDAQ:CPWM), a retailer of casual home furnishings, for $22 per share or about $495 million.
The deal represents a 22.3 percent premium to CPWM's previous closing price of $17.99.
Bed Bath anticipates that the purchase will slightly add to its net earnings per share for fiscal 2012. The company still targets high single digit to a low double digit percentage earnings per share growth for the year.
Oakland, California-based Cost Plus, with 2011 sales of $964 million, operates more than 259 stores in 30 states under the names "World Market" and "Cost Plus World Market."
Bed Bath expects the deal to close during its fiscal second quarter.
Red Mountain Capital Partners LLC and Stephens Investment Holdings LLC, the two largest shareholders of Cost Plus, have agreed to tender all of their shares.
Goldman, Sachs & Co. is acting as financial advisor to Bed Bath & Beyond. Peter J. Solomon Co. is acting as financial advisor to Cost Plus Inc.
On Wednesday, BBBY stock lost 2.2 percent to trade at $66.81, while CPWN shares were unchanged.