Bed Bath names Overstock as stalking horse bidder

Bed Bath & Beyond has selected Overstock.com as its "stalking horse" bidder for the intellectual property behind its namesake banner, according to a bankruptcy filing on Tuesday.

Driving the news: The position gives Overstock, an online discount retailer, the ability to get the first bid on Bed Bath's remaining assets.

• Bed Bath confirmed in an email that it received a stalking horse bid from Overstock to the tune of $21.5 million.
• Per the filing, this would be in cash.

Details: According to the filing, that includes all of Bed Bath's IP, goodwill, business data, internet properties, rights to mobile applications and certain contracts.

• Overstock's bid offers a break-up fee equal to 2% of the purchase price, or $430,000, and expense reimbursements of up to 2%.

How it works: The stalking horse bid sets the low-end of the bidding bar for the purchase price, for which other bidders can't go under and allows the company to get more competitive pricing.

What they're saying: "We will continue to solicit bids until the expected bid deadline of Friday, June 16," Bed Bath said in an emailed statement.

• "If additional bids are received, an auction is expected to take place the following week on Wednesday, June 21, to determine the winning bidder."

• The company expects to hold a final sale hearing on June 27.

Catch up fast: Bed Bath & Beyond filed for Chapter 11 bankruptcy in April.

• Bed Bath listed total assets of $4.4 billion and total debt of $5.2 billion as of last November, per court documents.

Overstock couldn’t immediately be reached for comment.

Editor's note: This story has been updated with additional comments and details.