Bed Bath & Beyond has asked its shareholders to approve a reverse stock split as the retailer fights to avoid filing for bankruptcy.
A reverse stock split would provide the company with enough shares to
raise up to $300M in equity from a stock offering. The company has
scheduled a special meeting for May 9.
- The company is considering a reverse split ratio in the range of 1-for-10 to 1-for-20.
- In
a recent filing, BB&B warned that if the reverse stock isn’t
approved, it would not have enough equity to pay its debts and keeps its
operations going.
- If approved, the split would significantly
reduce the number of outstanding shares of common stock available,
allowing the company to issue enough to cover the terms of the
offering.
- The split would also increase BB&B’s per-share price.
- BB&B shares were trading at around 30 cents during afternoon trading on Thursday; it closed at 31 cents per share.
- The stock is down nearly 90% YTD.
- Bed Bath & Beyond entered into a vendor consignment agreement with Hilco Global’s ReStore Capital.
- ReStore Capital agreed to buy up to $120M in merchandise from BB&B’s key suppliers to boost the retailer’s inventory levels.
