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Why Bed Bath & Beyond Stock Just Popped 10%

By Rich Smith – Aug 29, 2019 at 3:43PM

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The home furnishings specialist may be looking to unload some subsidiaries.

What happened

Shares of Bed Bath & Beyond (BBBY -1.62%) -- down 52% over the past year -- surged today on news that it may be selling some of its assets.

The stock is trading 10% higher as of 3:30 p.m. EDT, apparently in response to a report on corporate transaction information website The Deal, which said that Bed Bath & Beyond has hired Goldman Sachs to run an "auction process" for it.  

Rising blue and orange stock chart

Image source: Getty Images.

So what

So what exactly is going on here? As relates, The Deal is reporting that Goldman has been hired to auction off pieces of Bed Bath & Beyond to various parties interested in acquiring them. Specifically, an unnamed "ex-executive" has apparently teamed up with a private equity firm to offer $250 million to buy the company's Cost Plus World Market subsidiary. Two other bidders, including teleflorist 1-800-Flowers, are apparently offering as much as $250 million to $300 million to acquire Bed Bath & Beyond's PersonalizationMall. Finally, Oak Street Real Estate Capital is said to be interested in buying Bed Bath & Beyond's real estate and leasing it back to the company.

Now what

Combined, these offers appear to raise for Bed Bath & Beyond investors the prospect of a big cash infusion in the fairly near future. While it remains to be seen which (if any) of these offers will eventually pan out, the high level of interest in the company's assets alone is encouraging -- and more than enough to get Bed Bath & Beyond shareholders excited about their small-cap stock again.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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