A Bed Bath & Beyond store in the Brooklyn borough of New York, U.S., on Monday, Feb. 6, 2023.
Stephanie Keith | Bloomberg | Getty Images
Bed bath and beyond will live to see another day – at least for now.
The beleaguered home goods retailer expects to receive more than $1 billion in equity from a Hail Mary stock offering that it hopes will stave off bankruptcy and liquidation, the company said on Tuesday. Company.
Bed Bath will receive $225 million under the initial offer, plus an additional $800 million over time, he said.
The company also secured another $100 million loan from Sixth Street Partners, one of its lenders.
B. Riley Securities will be the sole bookrunner for the offering, Bed Bath said.
The cash injection will be used to pay off some of the retailer’s debt after it defaulted on a loan with JPMorgan last month and missed a $25 million interest payment on Feb. 1, the company said in a statement. securities deposits.
Anything left over will be used to help Bed Bath’s attempted turnaround, the company said. However, he warned that if the deal doesn’t work out he would “probably” file for bankruptcy and see his assets liquidated. The company said in a filing on Monday that it would close an additional 150 Bed Bath stores. It had already closed 200 of its namesake stores and 50 of its Harmon Face Values locations. There were 955 stores open at one point earlier last year.
The retailer is desperate to avoid bankruptcy and is looking for investors willing to pump money into the business or buy it, CNBC reported. Efforts have obviously failed so far, forcing Bed Bath to turn to public markets for funding.
Investors are likely to be wary of buying Bed Bath’s volatile stocks, but they may find some interest in the “even less rational stock crowd” who may be ready to “take the bait”, it said. Neil Saunders, Managing Director of GlobalData.
“In our view, this is a final roll of the dice from a company desperate to raise cash to give itself financial breathing room to service debt and maintain operations,” said analyst Saunders. and veteran retail consultant.
“There is no guarantee that the offer will produce the desired results,” he said. “Many investors will likely be discouraged by the incredibly weak balance sheet, the mountain of debt and a business that remains fundamentally broken.”
On Monday, shares of Bed Bath, which became a favorite when activist investor Ryan Cohen invested in the company last year, jumped more than 100%. (Cohen sold his stake after a few months.) The stock was down more than 40% on Tuesday, however. Its market value hovers around $380 million.
– CNBC Lillian Rizzo contributed to this report.
