It looks as though Linens 'n Things (NYSE:LIN) managed to squeak through the quarter and meet its merger obligations. In a press release issued Wednesday morning, the home-furnishings retailer said sales will be off less than 6%, as required, and that it likely has reached the $140 million EBITDA (earnings before interest, taxes, depreciation, and amortization) threshold necessary to allow the merger with private-equity group Apollo Management to go through.

You could hear the collective "Whew!" from shareholders as they bid up shares more than 10% in pre-market trading, to $26.50, closing in on the $28-per-share buyout price.

There had been a lot of consternation and doubt that the company would be able to jump over the hurdles that Apollo had placed before it. Sales have been dwindling all year long, and the equity group's original bid of $30 a share was withdrawn earlier this year, when more restrictive covenants could not be met. Even so, it's not assured that Linens 'n Things will have passed the test until it completes its year-end audit and files its financial statements. Until then, it looks like a nail-biter.

The home-housewares sector has entered rough seas this past month. Motley Fool Stock Advisor selection Bed Bath & Beyond (NASDAQ:BBBY) turned in a sales report at the lower end of guidance and was beaten up in the markets, while specialty retailers such as Pier 1 Imports (NYSE:PIR) and Restoration Hardware (NASDAQ:RSTO) have also taken it on the chin.

A lot of the churning waters can be attributed to discount retailers such as Target (NYSE:TGT) and Wal-Mart (NYSE:WMT), which have entered the segments and kept prices and margins low. These two behemoths have seen steadily increasing sales across all categories, a trend suggesting that consumers are still very price-sensitive for items they consider nonessential. Even mid-level retail operations such as J.C. Penney (NYSE:JCP) have been able to boost sales in the face of aggressive price-cutting.

The home-decor retailer still isn't getting the respect one would expect from a company that is in the midst of a merger and has announced that it should meet the conditions of the agreement. Even with the price jump Wednesday morning, the stock is sitting where it was when the buyout was announced. At least for the time being, the $1.3 billion deal is still on the table.

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Fool contributor Rich Duprey owns shares of Wal-Mart but has no stake in any other company mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.