Bed Bath & Beyond Inc. filed to sell as much as $300 million in shares as a rescue-financing deal with hedge fund Hudson Bay Capital Management struggles.
(Bloomberg) — Bed Bath & Beyond Inc. filed to sell as much as $300 million in shares as a rescue-financing deal with hedge fund Hudson Bay Capital Management struggles.
Bed Bath & Beyond said it would use the proceeds from the offering with B. Riley Securities to repay its credit facility and secure more merchandise for its stores. If the offering “is not fully consummated,” the company said Thursday, “we expect that we will likely file for bankruptcy protection.”
The troubled retailer had warned it might file for bankruptcy earlier this year but it averted that fate by securing a last-minute equity deal underpinned by investors led by Hudson Bay. The hedge fund agreed to provide the company with as much as $1 billion if certain conditions were met, including maintaining a certain share price range.
Since those terms weren’t met, Bed Bath & Beyond — whose sales have taken a nosedive — has sought new financing.
The shares fell as much as 13% in New York.
Read More: Bed Bath Hedge Fund Rescue Leaves Shares in Downward Spiral
The company also said in a filing that preliminary results from the fiscal fourth quarter ended Feb. 25 show a comparable sales decline in the 40% to 50% range and continued operating losses. Preliminary sales were about $1.2 billion, missing analyst estimates.
–With assistance from Eliza Ronalds-Hannon.
(Updates with Hudson Bay deal starting in first paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.