Restoration Fires Back at Sears

Restoration Hardware (RSTO) welcomed Sears Holdings (SHLD) to join its buyout process on Tuesday, but the high-end housewares chain said Ed Lampert's retail empire has to agree to a so-called standstill agreement.

"While Sears has announced its willingness to sign a confidentiality agreement, there is no agreement on terms and, to date, instead of agreeing to the standstill agreement to which other interested parties have agreed, Sears has proposed to reserve the right to launch a tender offer outside the process," said an independent committee of Restoration's board of directors in a statement on Tuesday.

A standstill agreement typically limits a company from buying shares in a target as a way of preventing a hostile takeover. Sears Holdings, the owner of the Sears and Kmart chains, already purchased a 13.7% stake in Restoration Hardware earlier this month.

Sears Holdings has suggested it was being shut out of the bidding on Restoration Hardware after a private firm called Catterton Partners teamed up with the company's chairman and CEO, Gary Friedman, to take it private for $6.70 a share, or about $267 million.

In a letter to Restoration's board that was made public in a regulatory filing Monday, Sears said it was willing to top Catterton's offer by a nickel a share, based on public information that was available. However, the retailer said it was confused by Restoration's demand that it make an offer before receiving access to insider information to evaluate the company.