Linens 'n Things Announces Agreement for $28 Per Share Cash Merger

The total consideration to be paid to Linens 'n Thingsstockholders is approximately $1.3 billion. Apollo has received acommitment from Bear, Stearns & Co. Inc. and UBS Securities LLC toprovide the debt financing for the transaction.

Norman Axelrod, Chairman and Chief Executive Officer of Linens 'nThings, stated, "This transaction with Apollo achieves the completionof our strategic review process. Apollo is investing in our concept,our company and our future, which will lead to additional newopportunities for all our associates and our business partners."

Peter Copses, a senior partner of Apollo, said, "We are extremelyexcited about the prospect of acquiring one of the nation's leadinghome goods retailers. We look forward to partnering with themanagement team to continue to build a world class retailer focused onits customers, vendors and employees. Apollo has had tremendoussuccess investing in retail businesses in the past and we expectLinens 'n Things to prosper going forward as well."

Linens 'n Things Board of Directors unanimously approved themerger transaction. Credit Suisse First Boston LLC and Lehman BrothersInc. have acted as the Company's financial advisors. Pitney Hardin LLPis acting as Linens 'n Things legal counsel. Morgan Lewis & BockiusLLP is acting as Apollo's legal counsel.

The parties currently anticipate consummating the merger in thefirst or early second quarter of 2006. Upon the closing of the merger,shares of Linens 'n Things common stock would no longer be listed onthe NYSE. The consummation of the merger is subject to customaryclosing conditions including the approval of Linens 'n Thingsstockholders, the funding of the contemplated debt financing, theexpiration of antitrust waiting periods, and no material adversechange in the Company's business.

The debt financing for the transaction is subject to variousconditions, including Linens 'n Things achieving EBITDA of not lessthan $140 million for the full 2005 fiscal year and comparable netsales of not less than negative 6% for the 2005 fourth quarter, aswell as other customary conditions for a leveraged acquisitionfinancing. There are many variables which can be expected to impactsatisfaction of these financial and other conditions to the debtfinancing and the Company cannot predict these results with certaintyor provide assurance that these conditions will be achieved.

Linens 'n Things, with 2004 sales of $2.7 billion, is one of theleading, national large format retailers of home textiles, housewaresand home accessories. As of September 30, 2005 Linens was operating516 stores in 45 states and five provinces across the United Statesand Canada. More information about Linens 'n Things can be foundonline at www.lnt.com.

Apollo is among the most active and successful private investmentfirms in the United States. Since its inception in 1990, Apollo hasmanaged the investment of more than $12 billion in a wide variety ofindustries, both domestically and internationally. During its history,Apollo has made several investments in retail-oriented businesses,including General Nutrition Centers, Inc., Rent-A-Center, Inc., RalphsGrocery Company, Dominick's Supermarkets and Zale Corporation, amongothers.

NRDC Real Estate Advisors I, LLC is a partnership between theprincipals of National Realty & Development Corp. and principals ofApollo Real Estate Advisors. National Realty & Development Corp. arethe owners and developers of over 14 million square feet of shoppingcenters throughout the United States.

The debt financing commitment defines EBITDA as net earningsbefore interest, taxes, depreciation and amortization, with otherspecified adjustments. Linens 'n Things' EBITDA prior to thoseadjustments for the first thirty-nine weeks of 2005, was approximately$54.5 million on an unaudited basis. Comparable store sales for fiscalOctober 2005 were approximately negative 8.4%. Linens 'n Things doesnot undertake or plan to update its 2005 fourth quarter results orexpectations until after its 2005 fiscal year is completed. TheCompany is currently scheduled to release its 2005 fourth quarter andfull year sales, comparable net sales, EBITDA and earnings in earlyFebruary 2006.

Important Information

In connection with the transaction, Linens 'n Things intends tofile relevant materials with the Securities and Exchange Commission,including a proxy statement. BECAUSE THOSE DOCUMENTS WILL CONTAINIMPORTANT INFORMATION, HOLDERS OF LINENS 'N THINGS COMMON STOCK AREURGED TO READ THEM CAREFULLY, IF AND WHEN THEY BECOME AVAILABLE. Whenfiled with the SEC, they will be available for free (along with anyother documents and reports filed by Linens 'n Things with the SEC) atthe SEC's website, www.sec.gov, and Linens 'n Things stockholders willreceive information at an appropriate time on how to obtaintransaction-related documents for free from Linens 'n Things. Suchdocuments are not currently available.

Participant Information

Linens 'n Things and its directors and executive officers may bedeemed to be participants in the solicitation of proxies from itsstockholders in connection with the proposed transaction. Certaininformation regarding the participants and their interest in thesolicitation is set forth in the proxy statement for Linens 'n Things'2005 annual meeting of stockholders filed with the SEC on April 8,2005 and the Form 4s filed by Linens 'n Things directors and executiveofficers since April 8, 2005. Stockholders may obtain additionalinformation regarding the interests of such participants by readingthe proxy statement relating to the proposed transaction when itbecomes available.

Forward-Looking Information

The foregoing contains forward-looking statements within themeaning of The Private Securities Litigation Reform Act of 1995. Theforward-looking information may be identified by such forward-lookingterminology as "anticipate," "believe," "may" and similar terms orvariations of such terms. Our forward looking statements, includingthose relating to consummation of the merger and satisfaction of theminimum financial conditions to the debt financing and otherconditions to the merger, are based on our current expectations,assumptions, estimates and projections about our Company and involvesignificant risks and uncertainties, including: the Company's negativeselling trends in fiscal 2005 and whether sales will sufficientlyimprove to achieve the financial conditions; the Company's ability toregain prior levels of guest traffic in its stores; a highlypromotional retail environment and aggressive pricing from otherretailers; the success of the holiday selling season, whichtraditionally begins in mid-November and historically accounts for adisproportionate share of 4Q sales and earnings; timing and size ofchanges in merchandise sales mix during 4Q toward housewares,gift-giving and other hard goods merchandise, which have had strongersales trends than soft goods; the timing and amount of merchandisemarkdowns in the fourth quarter and impact on 4Q gross margin; theimpact on discretionary consumer spending of substantially highergasoline and energy costs and higher interest rates; inventory makeupand in-stock positions in customer preferred merchandise; timing andamount of vendor allowances to be received by the Company; vendorsupport of promotional events and of merchandise markdowns; thesuccess of new business concepts, seasonal merchandise and new brands,including the Nate Berkus collection; the performance of new stores;impact of marketing changes and marketing timing; appropriate openingprice points and other matters affecting value perception for theCompany's merchandise; adverse weather conditionsincluding the impact which severe or unusual weather may have on guesttraffic or store closings; increase in fourth quarter expenses inanticipation of planned increased sales, which may or may not beachieved; the impact of fluctuations in Canadian exchange rates forthe Company's Canadian stores; rising healthcare benefit costs; sizeand amount of year-end inventory shrink expense or any othervariations between actual amounts and estimated amounts for theCompany's critical accounting estimates or other significantaccounting estimates; and the Company's difficulty in forecasting itsfuture sales, earnings and other financial results and the differencebetween forecasted results and actual results for prior fiscalperiods.

If these or other significant risks and uncertainties occur, or ifour estimates or underlying assumptions prove inaccurate, our actualresults could differ materially and the conditions to the consummationof the merger may not be satisfied. You are urged to consider all suchrisks and uncertainties. In light of the uncertainty inherent in suchforward-looking statements, you should not consider their inclusion tobe a representation that such forward-looking matters will beachieved. The Company assumes no obligation to and does not plan toupdate any such forward-looking statements.

Non-GAAP Information

EBITDA is used in this release because it is relevant toinvestors' understanding of one of the financial conditions to thedebt financing as described in the debt commitment letters referred toabove. EBITDA should not be considered as a measure of financialperformance under accounting principles generally accepted in theUnited States. The items excluded from EBITDA are significantcomponents in understanding and assessing financial performance of abusiness enterprise. EBITDA as referred to in this release is furthersubject to certain adjustments specific to the debt financingcommitment letters. The Company will file those letters with themerger agreement on a Current Report on Form 8-K. EBITDA should not beconsidered by itself or as an alternative to net income, cash flowsgenerated by operating, investing or financing activities or otherfinancial statement data presented in the consolidated financialstatements as an indicator of operating performance or as a measure ofliquidity.