Bed Bath & Beyond Buys Home Furnisher Cost Plus

Bed Bath & Beyond (NASDAQ:BBBY) agreed to acquire home furnishing chain Cost Plus (NASDAQ:CPWM) for about $495 million to expand its presence in California.

The home-goods retail giant will pay $22 a share for the Oakland, Calif.-based company. The boards of directors of both companies have unanimously approved of the deal.

Union, N.J.-based Bed Bath & Beyond has entered into agreements with two of Cost Plus’ major shareholders – Red Mountain Capital Partners and Stephens Investment Holdings. They have agreed to tender all of their shares, which together make up about a 26% interest in Cost Plus.

The smaller retailer’s chief executive, Barry Field, said the company is pleased that the transaction will offer compelling value to shareholders and excited new opportunities to help drive the business’s growth and momentum.

Shares of Cost Plus surged about 22% to a new high of $21.95 Wednesday.

The acquisition is slated to close during Bed Bath & Beyond’s fiscal second quarter. The company sees the deal being slightly accretive to its earnings in fiscal 2012 after transaction costs.

Goldman Sachs (NYSE:GS) is acting as financial advisor to Bed Bath & Beyond.