Linens ’n Things, Inc.
6 Brighton Road, Clifton, New Jersey 07015

December 27, 2005

To our Stockholders:

      You are cordially invited to attend a special meeting of the stockholders of Linens ’n Things, Inc., which will be held on Monday, January 30, 2006, beginning at 4:00 p.m., EST, at the Company’s headquarters located at 6 Brighton Road, Clifton, New Jersey 07015.

      At the special meeting, you will be asked to adopt a merger agreement which provides for Linens ’n Things to become a privately owned company and for you to be entitled to receive $28.00 in cash, without interest, for each share of Linens ’n Things common stock you own, unless you properly exercise appraisal rights with respect to the merger. The merger agreement, dated November 8, 2005, is by and among Linens ’n Things, Linens Holding Co. and Holding’s wholly-owned subsidiary, Linens Merger Sub Co. If the merger is completed, Merger Sub will be merged into Linens ’n Things, with Linens ’n Things as the surviving corporation in the merger and a subsidiary of Holding. Holding was formed by Apollo Management V, L.P. to acquire Linens ’n Things in the merger, and is owned by NRDC Real Estate Advisors I LLC, Silver Point Capital Fund Investments, LLC and affiliates of Apollo.

      Your board of directors has unanimously approved and declared the merger and the merger agreement advisable, and has declared that the merger is fair to and in the best interests of Linens ’n Things and its stockholders. Your board recommends that you vote “FOR” the adoption of the merger agreement.

      If the merger is completed, you will no longer hold any ownership interests in the surviving corporation; you will not participate in any future earnings or growth of Linens ’n Things; and you will not benefit from any appreciation in Linens ’n Things future value.

      The proxy statement attached to this letter provides you with information about the proposed merger and the special meeting. We encourage you to read the entire proxy statement carefully. You may also obtain more information about Linens ’n Things and the merger from documents we have filed with the Securities and Exchange Commission.

      Your vote is very important. The merger cannot be completed unless the merger agreement is adopted by the affirmative vote of the holders of a majority of the outstanding shares of Linens ’n Things common stock. If you fail to vote on the merger agreement, the effect will be the same as a vote against the adoption of the merger agreement at the special meeting.

      WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE SUBMIT A PROXY FOR YOUR SHARES BY MAIL. IF YOU RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOU OWN SHARES THAT ARE REGISTERED DIFFERENTLY, PLEASE SUBMIT A PROXY FOR ALL OF YOUR SHARES SHOWN ON ALL OF YOUR PROXY CARDS.

      Submitting a proxy will not prevent you from voting your shares in person if you subsequently choose to attend the special meeting.

      Thank you for your cooperation and continued support.

      Sincerely,

      Norman Axelrod
      Chairman of the Board and
      Chief Executive Officer

      Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

THIS PROXY STATEMENT IS DATED DECEMBER 27, 2005
AND IS FIRST BEING MAILED TO STOCKHOLDERS ON OR ABOUT DECEMBER 29, 2005.

Linens ’n Things, Inc.
6 Brighton Road, Clifton, New Jersey 07015

Notice of Special Meeting of Stockholders
to be held Monday, January 30, 2006

TO THE STOCKHOLDERS:

      The special meeting of stockholders of Linens ’n Things, Inc., a Delaware corporation, will be held on Monday, January 30, 2006, at 4:00 p.m., EST, at the Company’s headquarters located at 6 Brighton Road, Clifton, New Jersey 07015, for the following purposes:

      Only holders of Linens ’n Things common stock as of the close of business on December 15, 2005 are entitled to notice of the meeting and to vote at the meeting.

      You are cordially invited to attend the meeting in person.

      Your vote is important, regardless of the number of shares of Linens ’n Things common stock you own. The adoption of the merger agreement requires the approval of the holders of a majority of the outstanding shares of Linens ’n Things common stock entitled to vote at the meeting. The proposal to adjourn the meeting if necessary to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement requires the affirmative vote of a majority of the shares present and entitled to vote on the adjournment proposal, whether or not a quorum is present.

      If you sign, date and mail your proxy card without indicating how you wish to vote, your vote will be counted as a vote in favor of the adoption of the merger agreement, and in favor of the proposal to adjourn the meeting if necessary to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement. If you do not return your proxy card or attend the meeting and vote in person, your shares will not be counted in determining the presence of a quorum at the meeting. Your failure to vote will have the same effect as a vote against the adoption of the merger agreement. Failure to vote will not affect the outcome of the vote regarding the adjournment of the meeting if necessary to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement. If you are a stockholder of record and you attend the meeting, you may vote in person if you wish.

      Stockholders of Linens ’n Things who do not vote in favor of the adoption of the merger agreement will have the right to seek appraisal of the fair value of their shares if the merger is completed, but only if they submit a written demand for appraisal to Linens ’n Things before the vote is taken on the merger agreement and they comply with all requirements of Delaware law, which are summarized in the accompanying proxy statement.

	By Order of the Board of Directors,
	Brian D. Silva Senior Vice President, Human Resources, Administration and Corporate Secretary

December 27, 2005

TABLE OF CONTENTS

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

      The following questions and answers address briefly some questions you may have regarding the special meeting and the proposed merger. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement.

      Unless we otherwise indicate or unless the context requires otherwise, all references in this document to “Linens ’n Things,” the “Company,” “we,” “our,” “ours,” and “us” refer to Linens ’n Things, Inc. and its subsidiaries; all references to “Holding” refer to Linens Holding Co., all references to “Merger Sub” refer to Linens Merger Sub Co.; all references to “merger agreement” refer to the Agreement and Plan of Merger, dated November 8, 2005, by and among the Company, Holding and Merger Sub, a copy of which is attached as Annex A to this document, as it may be amended from time to time; and all references to the “merger” refer to the merger contemplated by the merger agreement.

      A: The special meeting of Linens ’n Things stockholders will be held at 4:00 p.m., EST, on Monday, January 30, 2006, at the Company’s headquarters located at 6 Brighton Road, Clifton, New Jersey 07015.

      A: You will vote on:

      A: Our board of directors unanimously recommends that you vote:

      A: Stockholders holding at least a majority of the shares of our common stock outstanding as of the close of business on December 15, 2005 must vote “FOR” the adoption of the merger agreement for us to complete the merger.

      A: The proposal to adjourn the meeting if necessary to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement requires the affirmative vote of a majority of the shares present in person or by proxy and entitled to vote on the adjournment proposal.

      A: Stockholders as of the close of business on December 15, 2005, the record date for the special meeting, are entitled to receive notice of and to vote at the meeting. On the record date, approximately 45,387,264 shares of our common stock, held by approximately 381 stockholders of record, were outstanding and entitled to vote at the meeting. You may vote all shares you owned as of the close of business on the record date. You are entitled to one vote per share.

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      A: If you have shares of our common stock that are registered differently and are in more than one account, you will receive more than one proxy card. Please follow the directions for submitting a proxy on each of the proxy cards you receive to ensure that all of your shares are voted.

      A: If you hold shares in your name as the stockholder of record, then you received this proxy statement and a proxy card from us. If you hold shares in street name through a broker, bank or other nominee, then you received this proxy statement from the nominee, along with the nominee’s form of proxy card which includes proxy submission instructions. In either case, you may submit a proxy for your shares by mail without attending the special meeting. To submit a proxy by mail, mark, sign and date the proxy card and return it in the postage-paid envelope provided.

      A: If you hold shares in your name as the stockholder of record, you may vote those shares in person at the meeting by giving us a signed proxy card or ballot before voting is closed. If you want to do that, please bring proof of identification with you. Even if you plan to attend the meeting, we recommend that you submit a proxy for your shares in advance as described above, so your vote will be counted even if you later decide not to attend.

      If you hold shares in street name through a broker, bank or other nominee, you may vote those shares in person at the meeting only if you obtain and bring with you a signed proxy from the nominee giving you the right to vote the shares. To do this, you should contact your nominee.

      A: After you submit a proxy for your shares you may change your vote at any time before voting is closed at the special meeting. If you hold shares in your name as the stockholder of record, you should write to our Secretary at our principal offices, 6 Brighton Road, Clifton, New Jersey 07015, stating that you want to revoke your proxy and that you need another proxy card. If you hold your shares in street name through a broker, bank or other nominee, you should contact the nominee and ask for a new proxy card. If you attend the special meeting, you may vote by ballot as described above, which will cancel your previous vote. Your last vote or proxy submission, as the case may be, before voting is closed at the special meeting is the vote that will be counted.

      A: A quorum of the holders of the outstanding shares of our common stock must be present for the special meeting to be held. A quorum is present if the holders of a majority of the outstanding shares of our common stock entitled to vote are present at the meeting, either in person or represented by proxy. Abstentions and broker non-votes are counted as present for the purpose of determining whether a quorum is present.

      A: Yes, but only if you provide instructions to your broker on how to vote. You should follow the directions provided by your broker regarding how to instruct your broker to vote your shares. Without those instructions, your shares will not be voted.

      A: You may vote “FOR”, “AGAINST” or “ABSTAIN” on each of the proposals. An abstention on a proposal will not count as a vote cast on that proposal, but will count for the purpose of determining whether a quorum is present.

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      A broker non-vote generally occurs when a broker, bank or other nominee holding shares on your behalf does not vote on a proposal because the nominee has not received your voting instructions and lacks discretionary power to vote the shares. Like an abstention, broker non-votes will not count as votes cast on a proposal, but will count for the purpose of determining whether a quorum is present.

      The affirmative vote of a majority of the outstanding shares of the Company is required to adopt the merger agreement. As a result, abstentions and broker non-votes on the proposal to adopt the merger agreement will have the same effect as a vote “AGAINST” the adoption of the merger agreement.

      The affirmative vote of a majority of the shares present and entitled to vote on the adjournment proposal, whether or not a quorum is present, is required to approve the proposal to adjourn the meeting. As a result, abstentions on the proposal to adjourn the meeting will have the same effect as a vote “AGAINST” that proposal, while broker non-votes on the proposal to adjourn the meeting will have NO EFFECT on that proposal.

      If you sign your proxy card without indicating your vote, your shares will be voted “FOR” the adoption of the merger agreement, “FOR” adjournment of the special meeting if necessary to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement, and in accordance with any recommendation of the board of directors, or, in the absence of a recommendation, in the discretion of the proxy agents named in the enclosed proxy card, on any other matter properly brought before the meeting for a vote.

      A: We will pay the cost of soliciting stockholder proxies, and have retained Georgeson Shareholder to assist us in this process for an estimated $16,000, plus expenses. We will, on request, reimburse stockholders who are brokers, banks or other nominees for their reasonable expenses in sending proxy materials to the beneficial owners of the shares they hold of record. No additional amounts will be paid for the solicitation of proxies by our directors, officers or employees. We will solicit proxies by mail and may also solicit them in person or by telephone, e-mail, facsimile or other electronic means of communication.

      A: No. Shortly after the merger is completed, you will receive a letter of transmittal with instructions informing you how to send your stock certificates to the paying agent in order to receive the merger consideration. You should use the letter of transmittal to exchange Linens ’n Things stock certificates for the merger consideration to which you are entitled as a result of the merger. DO NOT SEND ANY STOCK CERTIFICATES WITH YOUR PROXY.

      A: If you have more questions about the special meeting or the merger, you should contact Linens ’n Things, Attention: Investor Relations, 6 Brighton Road, Clifton, New Jersey 07015, or by telephone at (973) 815-2929.

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SUMMARY

      The following summary highlights selected information from this proxy statement. Accordingly, we encourage you to read carefully this entire proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions in the section entitled “Where You Can Find Additional Information” on page 62. Each item in this summary includes a page reference directing you to a more complete description of that item in this document.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

      This proxy statement, and many of the documents to which we refer you in this proxy statement, including documents incorporated by reference, contain forward-looking statements based on estimates and assumptions. Forward-looking statements include information concerning possible or assumed future results of operations of the Company, the expected completion and timing of the merger and other information relating to the merger. There are forward-looking statements throughout this proxy statement, including, among others, under the headings “Summary” and “The Merger” and in statements containing the words “believes,” “plans,” “expects,” “anticipates,” “intends,” “estimates” or other similar words or expressions. You should be aware that forward-looking statements involve significant known and unknown risks and uncertainties. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that the actual results or developments we anticipate will be realized, or even if realized, that they will have the expected effects on our business or operations. These forward-looking statements speak only as of the date on which they were made, and we undertake no obligation to publicly update or revise any forward-looking statements made in this proxy statement or elsewhere as a result of new information, future events or otherwise. In addition to other factors and matters contained or incorporated in this document, we believe the following factors could cause actual results to differ materially from those discussed in the forward-looking statements:

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THE PARTIES TO THE MERGER

Linens ’n Things, Inc.

      We are a Delaware corporation with our principal executive offices at 6 Brighton Road, Clifton, New Jersey 07015. Our telephone number is (973) 778-1300. We are one of the leading, national large format retailers of home textiles, housewares and home accessories operating 527 stores in 45 states and five provinces in Canada as of October 1, 2005. Our business strategy is to offer a broad selection of high quality brand-name as well as private label home furnishings merchandise at everyday values, to provide knowledgeable sales assistance and attentive guest service and to maintain low operating costs.

Linens Holding Co.

      Linens Holding Co., which we refer to as Holding, is a Delaware corporation formed on November 7, 2005 under the name “Laundry Holding Co.” Holding's name was changed to “Linens Holding Co.” on December 16, 2005. Holding was formed for the sole purpose of completing the merger with the Company and arranging the related financing transactions. Holding is indirectly wholly-owned by NRDC Real Estate Advisors I LLC, Silver Point Capital Fund Investments, LLC and affiliates of Apollo Management V, L.P. In this document, we refer to these three entities as the “equity investors.” In our description of the background of the merger, we refer only to “Apollo,” which took the lead role in negotiating on behalf of the equity investors. The interests of the equity investors may be transferred under certain circumstances. As a result, Holding may ultimately include additional or different equity participants. Holding has not engaged in any business except in anticipation of the merger. The business address of Holding is c/o Apollo Management, L.P., The MGM Tower, 10250 Constellation Boulevard, Suite 2900, Los Angeles, California 90067 and its telephone number is (310) 843-1900.

Linens Merger Sub Co.

      Linens Merger Sub Co., which we refer to as Merger Sub, is a Delaware corporation formed on November 7, 2005 under the name “Laundry Merger Sub Co.” Merger Sub's name was changed to “Linens Merger Sub Co.” on December 16, 2005. Merger Sub was formed for the sole purpose of completing the merger with the Company and arranging the related financing transactions. Merger Sub is a wholly-owned subsidiary of Holding. Merger Sub has not engaged in any business except in anticipation of the merger. The business address of Merger Sub is c/o Apollo Management, L.P., The MGM Tower, 10250 Constellation Boulevard, Suite 2900, Los Angeles, California 90067 and its telephone number is (310) 843-1900.

THE SPECIAL MEETING

Time, Place and Purpose of the Special Meeting

      This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by our board of directors for use at the special meeting to be held on Monday, January 30, 2006, starting at 4:00 p.m., EST, at the Company’s headquarters located at 6 Brighton Road, Clifton, New Jersey 07015. The purpose of the special meeting is for our stockholders to consider and vote upon a proposal to adopt the merger agreement and a proposal to adjourn the meeting if necessary to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement, and to act on other matters and transact other business as may properly come before the meeting. A copy of the merger agreement is attached to this proxy statement as Annex A. This proxy statement, the notice of the special meeting and the enclosed form of proxy are first being mailed to our stockholders on or about December 29, 2005.

Record Date, Quorum and Voting Power

      The holders of record of Linens ’n Things common stock as of the close of business on December 15, 2005, the record date for the special meeting, are entitled to receive notice of, and

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to vote at, the special meeting. As of the record date, there were 45,387,264 shares of our common stock issued and outstanding, all of which are entitled to be voted at the special meeting.

      Each outstanding share of our common stock as of the close of business on the record date entitles the holder to one vote on each matter submitted to stockholders for a vote at the special meeting.

      The holders of a majority of the outstanding common stock on the record date, represented in person or by proxy, will constitute a quorum for purposes of the special meeting. A quorum is necessary to hold the special meeting. Once a share is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting and any adjournment of the special meeting. However, if a new record date is set for an adjourned special meeting, then a new quorum will have to be established.

Required Vote

      For us to complete the merger, stockholders holding at least a majority of the shares of our common stock outstanding as of the close of business on the record date must vote “FOR” the adoption of the merger agreement. The proposal to adjourn the meeting if necessary to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement requires the affirmative vote of a majority of the shares present and entitled to vote on the adjournment proposal.

      In order for your shares of Linens ’n Things common stock to be included in the vote, if you are a stockholder of record, you must submit a proxy for your shares by returning the enclosed proxy or by voting in person at the special meeting.

      If your shares are held in “street name” by your broker, you should instruct your broker how to vote your shares using the instructions provided by your broker. If you have not received voting instructions or require further information on instructing your broker how to vote, contact your broker who can give you directions on how to cause your shares to be voted. A broker non-vote generally occurs when a broker, bank or other nominee holding shares on your behalf does not vote on a proposal because the nominee has not received your voting instructions and lacks discretionary power to vote the shares. Broker non-votes and abstentions will not count as votes cast on either proposal, but will count for the purpose of determining whether a quorum is present. As a result, abstentions will have the same effect as a vote against the adoption of the merger agreement or against adjournment of the meeting. Broker non-votes will have the same effect as a vote against the adoption of the merger agreement but will not affect a vote on adjournment of the meeting.

Voting by Directors and Executive Officers

      As of the close of business on December 15, 2005, the record date for the special meeting, our directors are entitled to vote a total of 236,698 shares of our common stock, representing approximately 0.5% of the shares entitled to vote at the special meeting. As of the record date, our directors and executive officers as a group are entitled to vote a total of 297,115 shares, representing approximately 0.7% of the shares entitled to vote. Our directors and our executive officers have informed us that they intend to vote all of their shares of our common stock “FOR” the adoption of the merger agreement and “FOR” the adjournment of the special meeting if necessary to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement. None of our directors or executive officers has entered into any voting agreements relating to the merger.

Proxies; Revocation

      If you submit a proxy for your shares of common stock by signing and delivering a proxy card, your shares will be voted at the special meeting in accordance with the instructions given. If no instructions are indicated on your signed proxy card, your shares will be voted “FOR” the adoption of the merger agreement, “FOR” adjournment of the meeting if necessary to solicit

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additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement, and in accordance with any recommendation of the board of directors, or, in the absence of a recommendation, in the discretion of the proxy agents named in the enclosed proxy card, on any other matter properly brought before the meeting for a vote.

      You may revoke your proxy at any time before the vote is taken at the special meeting. To revoke your proxy, you must either advise our Secretary of the revocation in writing, deliver a new proxy card dated after the date of the proxy you wish to revoke, or attend the special meeting and vote your shares in person. Attendance at the special meeting will not by itself constitute revocation of a proxy.

      If you have instructed your broker to vote your shares, the above options for revoking your proxy do not apply and instead you must follow the directions provided by your broker to change your voting instructions.

      Linens ’n Things does not expect that any matter will be brought before the special meeting other than the proposal to adopt the merger agreement and, possibly, the proposal to approve the adjournment of the meeting. If, however, another matter is properly presented at the special meeting or any adjournment or postponement of the meeting, the persons named as proxy agents in the enclosed proxy cards will vote the shares in accordance with the recommendation of our board of directors, or, in the absence of a recommendation, in the discretion of the proxy agents.

Expenses of Proxy Solicitation

      Linens ’n Things will pay the cost of this proxy solicitation and we have retained Georgeson Shareholder to assist us in this process for an estimated $16,000, plus expenses. We will, on request, reimburse stockholders who are brokers, banks or other nominees for their reasonable expenses in sending proxy materials to the beneficial owners of the shares they hold of record. No additional amounts will be paid for any proxies solicited by any of our directors, officers or employees. We will solicit proxies by mail and may also solicit them in person or by telephone, e-mail, facsimile or other electronic means of communication.

Adjournments and Postponements

      Although it is not currently expected, the special meeting may be adjourned or postponed for the purpose of soliciting additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement. Any adjournment may be made without notice, other than by an announcement made at the special meeting. The favorable vote of a majority of the shares of Linens ’n Things common stock present in person or represented by proxy and entitled to vote on the adjournment proposal may adjourn the meeting. Any adjournment or postponement of the special meeting will allow our stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned or postponed.

THE MERGER

Background of the Merger

      As part of its long-range planning, the Linens ’n Things board of directors has periodically evaluated strategic alternatives available to the Company including strategic business and operating plans and possible acquisitions and mergers. As part of that planning, the board of directors and management have also considered ways to address the increasing competitive pressures the Company faces from larger retailers with greater resources and operating leverage and the Company’s recent disappointing financial results.

      In mid-April 2005, the Company’s Chairman and Chief Executive Officer, Norman Axelrod, met with another retailer, who we refer to as the strategic retailer, to discuss a possible business combination transaction. The Company and this strategic retailer had engaged in general discussions about a business combination at times in the past. Representatives of the strategic retailer’s investment banking firm subsequently contacted representatives of Credit Suisse First

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Boston LLC, the Company’s financial advisor, and advised that the strategic retailer was interested in potentially acquiring the Company for $27.00 per share in cash.

      Mr. Axelrod convened a meeting of the Company’s board of directors on April 26, 2005 and asked representatives of Credit Suisse First Boston and Pitney Hardin LLP, the Company’s legal counsel, to participate. Mr. Axelrod advised the board regarding his meeting with the strategic retailer and its interest in potentially acquiring the Company for $27.00 per share in cash. The board discussed possible courses of action in response to the strategic retailer’s indication of interest and determined that the indicated value proposed by the strategic retailer was not acceptable at that time. The board authorized representatives of Credit Suisse First Boston to advise the strategic retailer of its determination and also requested that Credit Suisse First Boston assist the board in analyzing the Company’s strategic alternatives.

      The board of directors held a regularly scheduled meeting on May 5, 2005, and representatives of Credit Suisse First Boston and Pitney Hardin attended a portion of the meeting. At this meeting, the board reviewed with the representatives of Credit Suisse First Boston and Pitney Hardin possible strategic alternatives available to the Company.

      A meeting of the board was held on May 25, 2005, with representatives of Credit Suisse First Boston and Pitney Hardin attending, at which representatives of Credit Suisse First Boston reviewed with the board Credit Suisse First Boston’s preliminary financial analysis of the Company based on information provided to it by Company management. The board discussed the importance of keeping the strategic review process confidential. Representatives of Credit Suisse First Boston reviewed with the board various strategic and financial parties that would likely have an interest in, and the ability to consummate, a business combination transaction with the Company. At the conclusion of the meeting, the board directed the representatives of Credit Suisse First Boston to contact, on a confidential basis, those potentially interested strategic and financial parties.

      In late May 2005, a representative of Jakup a Dul Jacobsen contacted representatives of the Company and advised that Mr. Jacobsen had recently acquired beneficial ownership of approximately 4.2% of the Company’s outstanding common stock and might be interested in making an additional investment in the Company. Mr. Jacobsen made a filing under the HSR Act on June 1, 2005, indicating that he had a good faith intention to purchase additional Company shares, up to an aggregate investment in the Company of approximately $106 million, which level of investment would require prior filing and expiration of the HSR waiting period. At the Company’s request, representatives of Credit Suisse First Boston had discussions with a representative of Mr. Jacobsen on June 20, 2005 and on July 6, 2005 to discuss his intent in purchasing the Company’s shares. Mr. Jacobsen’s representative advised that the shares had been acquired as an investment and not with a view toward acquiring the Company.

      Between the last week of May 2005 and the first week of June 2005, pursuant to the direction given by the board at the May 25 board meeting, representatives of Credit Suisse First Boston confidentially contacted eight potentially interested parties, of which five were strategic parties (not including the strategic retailer) and three were financial parties that had previously expressed a potential interest in an acquisition of the Company and had prior acquisition experience in the retail industry. Four of the strategic parties indicated that they did not have an interest in a business combination transaction with the Company at that time. One strategic party and each of the financial parties, including Apollo Management V, L.P., indicated interest in a potential transaction and subsequently executed confidentiality agreements with the Company. Subsequent to the initial contact by representatives of Credit Suisse First Boston, Apollo requested that two other firms, Silver Point Capital, L.P. and NRDC Real Estate Advisors I LLC, participate with Apollo in connection with the potential acquisition of the Company, and these two other firms also executed confidentiality agreements with the Company.

      Between June 14, 2005 and June 20, 2005, the Company provided each of the parties which had executed a confidentiality agreement, including Apollo, with initial information concerning the Company. In addition, at the Company’s direction, representatives of Credit Suisse First Boston held meetings with each of the four initially interested parties, including Apollo. At the conclusion

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of these meetings, each of the four initially interested parties was asked to provide the Company with a preliminary indication of interest regarding a potential transaction with the Company.

      On June 23, 2005, Mr. Axelrod was contacted by the strategic retailer concerning its continuing interest in a potential acquisition of the Company. Mr. Axelrod confirmed to the strategic retailer that its initial indication of interest had been unacceptable and also confirmed that the Company had undertaken a strategic review process with the assistance of Credit Suisse First Boston. In a subsequent telephone conversation that same day, the strategic retailer advised that there was some flexibility in its initial indication of interest. The strategic retailer also advised that it did not wish to participate in the strategic review process and that the Company should contact it at the conclusion of that process.

      Between June 28, 2005 and July 6, 2005, Credit Suisse First Boston, on behalf of the Company, received preliminary indications of interest from the three financial parties that had executed confidentiality agreements, including Apollo. The fourth party, the remaining strategic party, declined to provide a preliminary indication of interest.

      The board of directors held a meeting on July 7, 2005, at which representatives of Credit Suisse First Boston and Pitney Hardin participated. At this meeting, representatives of Pitney Hardin reviewed with the directors their fiduciary duties in connection with their review of strategic alternatives. Also at this meeting, the board reviewed the process that Credit Suisse First Boston had conducted to date with respect to strategic alternatives and discussed possible alternative approaches to that process. In addition, representatives of Credit Suisse First Boston reviewed with the board the terms of the preliminary indications of interest that had been submitted, all of which were in excess of the $27.00 per share indication of interest previously submitted by the strategic retailer. Following discussion, the board of directors directed Credit Suisse First Boston, with the assistance of senior management, to provide each of the financial parties that had provided a preliminary indication of interest, including Apollo, with additional business, financial and legal information about the Company. The board also directed Credit Suisse First Boston to engage in additional discussions with the strategic retailer in an effort to encourage it to participate in the strategic review process.

      Throughout July, August, and the first half of September 2005, each financial party that had provided a preliminary indication of interest, including Apollo, conducted business, financial and legal due diligence on the Company, including meetings with senior management.

      On August 3, 2005, Apollo delivered a non-binding proposal to the Company to acquire the Company for $33.00 per share in cash. The non-binding proposal included Apollo’s request that the Company agree to reimburse 50% of Apollo’s out-of-pocket expenses relating to its remaining due diligence. Apollo also verbally requested that the Company enter into exclusive negotiations with Apollo. The Company did not agree to these requests.

      Between late July and the end of August 2005, further discussions occurred with the strategic retailer concerning whether the strategic retailer would participate in the strategic review process and provide a proposal at a level above its initial indication of interest of $27.00 per share in cash. On August 10, 2005, Mr. Axelrod spoke with the strategic retailer to advise it to act promptly and communicate with Credit Suisse First Boston if it wished to participate in the process. On August 16, 2005, the strategic retailer contacted Mr. Axelrod and reported that although it was interested in exploring a potential acquisition of the Company, it was not prepared to make a proposal at a level which would have been competitive with the indications of interest submitted by the participants in the strategic review process.

      In mid-August 2005, two of the financial parties participating in the strategic review process, other than Apollo, provided the Company with updated preliminary indications of interest. One increased its earlier range of indicated value and the other retained its earlier valuation range.

      On August 11, 2005, representatives of the Company management met with representatives of Mr. Jacobsen and generally discussed the Company and its business. Mr. Jacobsen’s representatives discussed his interest as an investor in the Company and indicated that he might have an interest in pursing mutually beneficial commercial opportunities and increasing the level of his investment in the Company. Mr. Jacobsen’s representatives reiterated that he viewed his stock as an

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investment opportunity and was not interested in acquiring a controlling interest in Linens ’n Things.

      In mid-August 2005, an additional financial party, which was advised by a retail industry veteran who was familiar with the Company, was invited to join the strategic review process, signed a confidentiality agreement, immediately began business, financial and legal due diligence and subsequently submitted to the Company a preliminary indication of interest. In addition, during this time, the other three interested parties continued their business, financial and legal due diligence. In connection with the due diligence process, representatives of the Company advised each strategic review participant about the disappointing trends in the Company’s financial results, including the Company’s expectation that its third quarter 2005 consolidated net earnings before net interest, income taxes, depreciation and amortization, which we refer to as EBITDA, would be substantially less than what the Company had previously expected.

      During August 2005, legal counsel to Apollo, Morgan Lewis & Bockius LLP, began negotiations with Pitney Hardin regarding the draft merger agreement which had been prepared by Pitney Hardin and sent to each of the interested parties. In late August 2005 each of the four interested parties was asked to submit an updated indication of interest.

      On August 25, 2005, the board of directors held a meeting, at which representatives of Credit Suisse First Boston and Pitney Hardin participated. At this meeting, the board reviewed the process that Credit Suisse First Boston had conducted to date with respect to strategic alternatives, including Apollo’s August 3 non-binding proposal, the updated preliminary indications of interest from the other interested parties, and that the strategic retailer continued to decline to participate in the strategic review process or increase its earlier indication of interest. In addition, Pitney Hardin again reviewed the board’s fiduciary duties in connection with the strategic review process.

      On September 14, 2005, the financial media reported that the Company had engaged Credit Suisse First Boston as its financial advisor to explore strategic alternatives and was considering a possible sale of the Company.

      Also on September 14, 2005, Apollo submitted an updated, non-binding proposal to acquire all of the shares of the Company at a purchase price of $30.00 per share in cash, provided that the purchase price would be reduced to $28.00 per share in cash if the Company failed to achieve both full year 2005 EBITDA of not less than $167 million and 2005 fourth quarter comparable net sales of not less than negative 1%. Concurrently with submission of this non-binding proposal, Apollo provided drafts of its proposed equity financing and debt financing commitments. The debt financing commitment included a minimum financial condition that the Company achieve full year 2005 EBITDA of not less than $145 million and 2005 fourth quarter comparable net sales of not less than negative 4%.

      On September 16, 2005, the board of directors held a meeting to receive an update on the strategic review process and to discuss the September 14 Apollo non-binding proposal. Representatives of Credit Suisse First Boston and Pitney Hardin participated in the meeting. Company management reviewed financial results for the third quarter to date and financial expectations for the balance of the fiscal year. Also at this meeting, representatives of Credit Suisse First Boston updated the board concerning the strategic review process to date, including the impact on the process of the disappointing trends in the Company’s financial results, the difficulty faced by each of the remaining interested parties in connection with the leveraged acquisition debt market due to the decreasing level of EBITDA expected by the Company and the absence of an updated indication of interest from the remaining interested parties other than Apollo. Credit Suisse First Boston reviewed with the board the terms of Apollo’s non-binding proposal, including the equity commitment proposed to be made by Apollo. The board of directors discussed Apollo’s potential bifurcated price term as well as the substantial likelihood, based on the information provided by Company management, that the Company would not achieve the EBITDA and comparable net sales targets required for the higher purchase price of $30.00 per share in cash. In addition, the board discussed the Company remaining a stand-alone, independent company, and considered the Company’s business and prospects, the retail industry generally, current results of competitors, and other issues in connection with assessing the Company as a

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stand-alone entity. Pitney Hardin reviewed the directors’ fiduciary duties in connection with considering strategic alternatives. Following these discussions, the board directed Credit Suisse First Boston to seek more favorable terms from Apollo and to make further attempts to obtain a proposal from the strategic retailer. The board of directors also determined to continue to assess the potential values, risks and uncertainties concerning Linens ’n Things remaining a stand-alone, independent company.

      Following September 16, 2005, further contacts were made with representatives of the strategic retailer, and Mr. Axelrod was subsequently advised that any proposal that the strategic retailer might make would be based on the strategic retailer’s view of the Company’s market value taking into account the Company’s third quarter financial results, which the strategic retailer believed would be disappointing. As a result, the representatives of the strategic retailer advised that any proposal would likely be below $27.00 per share.

      On September 20, 2005, representatives of Credit Suisse First Boston, on behalf of the Company, responded to Apollo’s non-binding proposal by indicating that a purchase price of not less than $29.00 per share in cash, with no financial targets and no financial minimum conditions, might be acceptable to the Company. The Company’s response also contemplated a substantial reduction in the proposed breakup fee and addressed other changes the Company sought in the Apollo non-binding proposal.

      On September 22, 2005, the Company publicly announced its outlook for 2005 third quarter earnings and comparable net sales, stating that it expected earnings for the quarter to be breakeven, compared with a consensus estimate of $0.29 per share, and that it expected comparable net sales for the quarter to be approximately negative 10%. In its press release Linens ’n Things also publicly confirmed that it was exploring strategic alternatives, including a possible sale of the Company, and had engaged Credit Suisse First Boston as its financial advisor.

      Following, and in response to, the mid-September 2005 media reports and the Company’s subsequent public confirmation that it was exploring strategic alternatives, additional financial firms contacted representatives of Credit Suisse First Boston concerning the Company’s strategic review process. Based on these contacts, in early October the Company invited into the strategic review process one additional financial firm which had been active in completing significant acquisitions in the retail industry and had the financial resources to complete a transaction with the Company. That firm subsequently executed a confidentiality agreement with the Company but ultimately did not make an acquisition proposal.

      Throughout September and October 2005, Apollo continued to update its business, financial and legal due diligence investigation of the Company.

      On September 26, 2005, Apollo provided Linens ’n Things with a revised non-binding proposal to acquire the Company for $27.50 per share in cash, subject to the Company satisfying financial minimum conditions contained in the debt financing commitments of not less than $140 million EBITDA for the 2005 fiscal year and comparable net sales of not less than negative 5% for the 2005 fourth quarter. Apollo also reduced the requested breakup fee and confirmed that its debt providers had completed their due diligence. The proposed reduction in purchase price reflected the reduced minimum EBITDA as well as the disappointing trends in the Company’s financial results.

      On September 26, 2005, one of the principal investment bankers at Credit Suisse First Boston who had a long-standing advisory relationship with the Company left Credit Suisse First Boston and continued to advise the Company, along with Credit Suisse First Boston, in connection with the strategic review process. Subsequently, in late October 2005, this individual joined Lehman Brothers, Inc. and the Company retained Lehman Brothers as a co-financial advisor with Credit Suisse First Boston in connection with the strategic review process.

      During the week of September 26, 2005, at the request of the Company, representatives of the Company’s financial advisors discussed the revised non-binding proposal with Apollo. Among other things, representatives of the Company’s financial advisors, on behalf of the Company, proposed an increased purchase price as well as the complete elimination of the financial minimum conditions and sought a further substantial reduction in the proposed breakup fee. During that week,

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representatives of the Company’s financial advisors also had further discussions with representatives of the strategic retailer, none of which resulted in a proposal being made by the strategic retailer.

      On September 30, 2005, Apollo increased its proposed purchase price to $28.00 per share in cash, with debt financing conditioned upon the Company achieving full year 2005 EBITDA of at least $140 million and 2005 fourth quarter comparable net sales of not less than negative 5%.

      On October 5, 2005, a representative of Mr. Jacobsen, who had recently increased his investment in the Company to approximately 9.9%, contacted representatives of the Company’s financial advisors, asked about the strategic review process, and advised that Mr. Jacobsen’s investment intent had not changed.

      The board of directors held a meeting on October 5, 2005, with representatives of the Company’s financial advisors and Pitney Hardin participating. Mr. Axelrod reviewed with the board the negative impact within the Company of the recent public announcement of its strategic review process, knowledge of which had previously been very limited within the Company. Company management reviewed the Company’s recent financial results and financial expectations for the balance of fiscal 2005. Management provided its outlook for 2005 fourth quarter performance and its expectations concerning the financial minimum conditions contained in Apollo’s non-binding proposal. Also at this meeting, representatives of the Company’s financial advisors updated the board concerning the strategic review process to date and reviewed with the board the terms of Apollo’s current non-binding proposal. Pitney Hardin again reviewed with the directors their fiduciary duties in connection with the strategic review process including a possible sale of the Company. At the conclusion of the meeting, the board instructed the Company’s financial advisors to continue to seek improved terms from Apollo, including improved financial minimum conditions.

      On October 7, 2005, at the Company’s request, representatives of the Company’s financial advisors proposed revised terms to Apollo, including a purchase price of $28.00 per share in cash, a reduced breakup fee and debt financing conditioned upon the Company achieving a minimum 2005 full year EBITDA of $135 million.

      Apollo responded on October 11, 2005 with a proposal that it characterized as its “last, best and final offer.” The revised proposal retained the debt financing condition that fiscal 2005 EBITDA must be no less than $140 million, but reduced the required minimum 2005 fourth quarter comparable net sales to negative 6% and further reduced the proposed breakup fee. In discussions on October 12, 2005 representatives of the Company’s financial advisors attempted, but were unable, to achieve further improvements in the proposed financial terms of the Apollo proposal.

      At a meeting on October 14, 2005, a representative of Mr. Jacobsen advised representatives of Credit Suisse First Boston that Mr. Jacobsen was considering purchasing additional Company shares. The Credit Suisse First Boston representatives advised that if Mr. Jacobsen had interest in acquiring the Company he would need to act promptly and execute a confidentiality agreement. Mr. Jacobsen did not subsequently indicate such an interest or make a proposal to acquire the Company.

      Also on October 14, 2005, the board of directors held a meeting, with representatives of the Company’s financial advisors and Pitney Hardin participating. At the meeting, representatives of the Company’s financial advisors updated the board concerning the strategic review process to date and reviewed with the board the terms of Apollo’s current proposal. At the conclusion of the meeting, the board instructed the Company’s financial advisors to proceed with additional negotiations with Apollo.

      Between October 17 and October 25, 2005, representatives of the Company’s financial advisors and Pitney Hardin had discussions with representatives of Apollo and Morgan Lewis, respectively, concerning open issues in connection with the proposed merger agreement, equity financing commitments, debt financing commitments, as well as with respect to a particular third-party consent which Apollo required in order to move forward with the proposed transaction and which was eventually obtained.

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      A board meeting was held on October 26, 2005 and attended by representatives of the Company’s financial advisors and Pitney Hardin. At the meeting, management reviewed 2005 third quarter results and expected 2005 fourth quarter financial performance. Representatives of the Company’s financial advisors updated the board concerning the strategic review process to date and reviewed with the board the terms of Apollo’s current proposal. Representatives of Credit Suisse First Boston reviewed with the board their preliminary financial analysis with respect to Apollo’s current proposal. Pitney Hardin reviewed with the board of directors the material terms of the proposed merger agreement, the terms of the proposed debt and equity financing commitments and other transaction matters, and the remaining outstanding material issues. In advance of the meeting, directors had been provided with a copy of the merger agreement together with a summary of the merger agreement and of the equity and debt financing commitments. Pitney Hardin also reviewed with the directors their fiduciary duties in connection with consideration of strategic alternatives including a possible sale of the Company. The directors discussed, among other matters, the strategic review process, the Apollo proposal, timing, closing risks, the equity commitment proposed by Apollo, the current leveraged acquisition debt market, the financial minimum conditions under the debt financing commitments, management expectations for the Company’s 2005 fourth quarter, and other related matters. Following discussion, the board of directors authorized the Company’s financial advisors to continue negotiations with Apollo.

      Between October 26, 2005 and November 3, 2005, representatives of the Company’s financial advisors and Pitney Hardin continued discussions with representatives of Apollo and Morgan Lewis, respectively, concerning outstanding issues under the merger agreement, equity financing commitments, debt financing commitments, the proposed breakup fee and other outstanding matters.

      On November 3, 2005, in a telephone call between representatives of Apollo and the Company’s financial advisors, the representatives of Apollo indicated that Apollo was not prepared to further improve its proposed terms and indicated further that its most recent proposal would expire if not accepted by Monday, November 7, 2005. From November 3 through November 7, 2005, representatives of the Company’s financial advisors and Pitney Hardin had discussions and negotiations with representatives of Apollo and Morgan Lewis, respectively, concerning all outstanding issues under the merger agreement, including the proposed breakup fee, which Apollo agreed to reduce to $27 million, equity financing commitments and debt financing commitments.

      On November 7, 2005, the board of directors held a meeting to consider approval of the merger agreement, at which representatives of the Company’s financial advisors and Pitney Hardin participated. At the meeting, representatives of the Company’s financial advisors updated the board on the events that had occurred since the October 26 board meeting. Representatives of Pitney Hardin reviewed with the board the updated, final terms of the proposed merger agreement and further discussed the board’s fiduciary duties. Representatives of the Company’s financial advisors and Pitney Hardin also reviewed with the board the final terms of the debt financing commitments and equity financing commitments. Company management reviewed October sales results and November sales results to date, and provided an update of management’s expectations for fourth quarter financial performance. Also at this meeting, representatives of Credit Suisse First Boston reviewed with the board its financial analysis of the merger consideration, as preliminarily reviewed with the board at the October 26 meeting, and rendered to the board an oral opinion, which opinion was confirmed by delivery of a written opinion dated November 7, 2005, to the effect that, as of that date and based on and subject to the matters described in its opinion, the merger consideration was fair, from a financial point of view, to the holders of Company common stock. Following discussion, the Company’s board of directors, by unanimous vote, approved and declared advisable the merger agreement and the merger and resolved to recommend that the Company’s stockholders adopt the merger agreement all subject to and conditioned on legal counsel confirming the receipt of the third-party consent and final, executed equity commitments and debt financing commitments.

      In the morning of November 8, 2005, the Company, Merger Sub and Apollo executed the merger agreement. Thereupon, the Company and Apollo issued a joint press release announcing the merger.

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Reasons for the Merger

      Our board of directors unanimously approved and determined that the merger agreement and the merger, upon the terms and conditions set forth in the merger agreement, are advisable, fair to and in the best interests of Linens ’n Things and its stockholders. In the course of reaching its decision to approve the merger agreement and the merger, the board consulted with the Company’s financial and legal advisors and considered a number of factors that it believed supported its decision, including the following:

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      Your board of directors also considered a variety of risks and other potentially negative factors concerning the merger agreement and the merger, including the following:

      The foregoing discussion summarizes the material factors considered by the board of directors in its consideration of the merger. After considering these factors, the board of directors concluded that the positive factors relating to the merger agreement and the merger outweighed the negative factors. In view of the wide variety of factors considered by the board of directors, the board did not find it practicable to quantify or otherwise assign relative weights to the foregoing factors. In addition, individual directors may have assigned different weights to various factors. The board of directors approved and recommends the merger agreement and the merger based upon the totality of the information presented to and considered by it.

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Recommendation of the Board of Directors

      After careful consideration, your board of directors, by unanimous vote:

Opinion of Credit Suisse First Boston LLC

      Credit Suisse First Boston LLC has acted as financial advisor to Linens ’n Things in connection with the merger. In connection with Credit Suisse First Boston’s engagement, Linens ‘n Things requested it to evaluate the fairness, from a financial point of view, to the holders of Linens ’n Things common stock of the merger consideration. On November 7, 2005, at a meeting of the Linens ’n Things board of directors held to evaluate the merger, Credit Suisse First Boston rendered to the board an oral opinion, which opinion was confirmed by delivery of a written opinion dated November 7, 2005, to the effect that, as of that date and based on and subject to the matters described in its opinion, the merger consideration was fair, from a financial point of view, to the holders of Linens ’n Things common stock.

      The full text of Credit Suisse First Boston’s written opinion, dated November 7, 2005, to the Linens ’n Things board of directors, which sets forth the procedures followed, assumptions made, matters considered and limitations on the review undertaken, is attached as Annex B and is incorporated into this proxy statement by reference. You are encouraged to read this opinion carefully in its entirety. The opinion was provided to the board in connection with the board’s evaluation of the merger consideration and relates only to the fairness, from a financial point of view, of the merger consideration, does not address any other aspect of the proposed merger and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act with respect to any matters relating to the merger. The summary of Credit Suisse First Boston’s opinion in this proxy statement is qualified in its entirety by reference to the full text of the opinion.

      In arriving at its opinion, Credit Suisse First Boston reviewed a draft dated November 4, 2005 of the merger agreement and drafts of certain related documents, as well as certain publicly available business and financial information relating to Linens ’n Things. Credit Suisse First Boston also reviewed certain other information relating to the Company, including financial forecasts provided to or discussed with Credit Suisse First Boston by the Company, and met with Company management to discuss the Company’s business and prospects. Credit Suisse First Boston also considered certain financial and stock market data of Linens ’n Things and compared that data with similar data for other publicly held companies in businesses Credit Suisse First Boston deemed similar to the Company, and considered, to the extent publicly available, the financial terms of certain other business combinations and transactions which had been effected or announced. Credit Suisse First Boston also considered such other information, financial studies, analyses and investigations and financial, economic and market criteria as it deemed relevant.

      In connection with its review, Credit Suisse First Boston did not assume any responsibility for independent verification of any of the information it reviewed and relied on that information being complete and accurate in all material respects. With respect to the financial forecasts for Linens ’n Things that Credit Suisse First Boston reviewed, Company management advised Credit Suisse First Boston, and Credit Suisse First Boston assumed, that the forecasts were reasonably prepared on bases reflecting the best currently available estimates and judgments of Company management as to the Company’s future financial performance. Credit Suisse First Boston also assumed, with the Company’s consent, that in the course of obtaining any regulatory or third party consents, approvals or agreements in connection with the merger, no modification, delay, limitation, restriction or condition would be imposed that would have an adverse effect on Linens ’n Things or the merger and that the merger would be consummated in accordance with the terms of the

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merger agreement, without waiver, modification, amendment or adjustment of any material term, condition or agreement therein. In addition, Credit Suisse First Boston was not requested to make, and did not make, an independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of Linens ’n Things, nor was Credit Suisse First Boston furnished with any such evaluations or appraisals. Representatives of Linens ’n Things advised Credit Suisse First Boston, and Credit Suisse First Boston assumed, that the merger agreement and related documents, when executed, would conform to the drafts reviewed by Credit Suisse First Boston in all respects material to its analyses. Credit Suisse First Boston’s opinion addressed only the fairness, from a financial point of view, to the holders of Linens ’n Things common stock of the merger consideration and did not address any other aspect or implication of the merger or any other agreement, arrangement or understanding entered into in connection with the merger or otherwise. The opinion was necessarily based upon information made available to Credit Suisse First Boston as of the date of the opinion and upon financial, economic, market and other conditions as they existed and could be evaluated on that date. Credit Suisse First Boston’s opinion did not address the relative merits of the merger as compared to other business strategies or transactions that might be available to Linens ’n Things, nor did it address the underlying business decision of Linens ’n Things to proceed with the merger.

      In preparing its opinion to the Linens ’n Things board of directors, Credit Suisse First Boston performed a variety of financial and comparative analyses, including those described below. The summary of Credit Suisse First Boston’s analyses described below is not a complete description of the analyses underlying Credit Suisse First Boston’s opinion. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to particular circumstances and, therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, Credit Suisse First Boston made qualitative judgments as to the significance and relevance of each analysis and factor that it considered. Credit Suisse First Boston arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis. Accordingly, Credit Suisse First Boston believes that its analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying its analyses and opinion.

      In its analyses, Credit Suisse First Boston considered industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of Linens ’n Things. No company, transaction or business used in Credit Suisse First Boston’s analyses as a comparison is identical to Linens ’n Things or the proposed merger, and an evaluation of the results of those analyses is not entirely mathematical. Rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies, business segments or transactions analyzed. The estimates contained in Credit Suisse First Boston’s analyses and the ranges of valuations resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold. Accordingly, the estimates used in, and the results derived from, Credit Suisse First Boston’s analyses are inherently subject to substantial uncertainty.

      Credit Suisse First Boston’s opinion and financial analyses were only one of many factors considered by the Linens ’n Things board of directors in its evaluation of the proposed merger and should not be viewed as determinative of the views of the Company’s board or management with respect to the merger or the merger consideration.

      The following is a summary of the material financial analyses presented to the board in connection with Credit Suisse First Boston’s opinion dated November 7, 2005.

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      The financial analyses summarized below include information presented in tabular format. In order to fully understand Credit Suisse First Boston’s financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Credit Suisse First Boston’s financial analyses.

      Discounted Cash Flow Analysis

      Credit Suisse First Boston calculated the estimated present value of the stand-alone, unlevered, after-tax free cash flows that Linens ’n Things could generate over calendar years 2006 through 2010 based on internal estimates of Company management provided to or discussed with Credit Suisse First Boston. Credit Suisse First Boston calculated a range of estimated terminal values for Linens ’n Things by multiplying its calendar year 2010 estimated earnings before net interest, income taxes, depreciation and amortization, commonly referred to as EBITDA, by selected multiples ranging from 5.5x to 7.0x. The estimated after-tax free cash flows and terminal values were then discounted to present value using discount rates of 13.0% to 15.0%. This analysis indicated the following implied per share equity reference range for Linens ’n Things as compared to the per share merger consideration:

      Selected Companies Analysis

      Credit Suisse First Boston reviewed the market values and trading multiples of Linens ’n Things and the following eight selected publicly held companies in the specialty retail industry:

      Credit Suisse First Boston compared enterprise values, calculated as equity value plus debt, minority interest and preferred stock, less cash and cash equivalents, as a multiple of the latest 12 months and estimated calendar years 2005 and 2006 EBITDA. Credit Suisse First Boston also compared equity values per share as a multiple of calendar years 2005 and 2006 estimated earnings per share. Credit Suisse First Boston then applied ranges of selected multiples described above for the selected companies to corresponding financial data of Linens ’n Things based on internal estimates of Company management. All multiples were based on closing stock prices on November 4, 2005. Financial data for the selected companies was based on publicly available research analysts’ estimates, public filings and other publicly available information. Financial data for Linens ’n Things was based on internal estimates of management of Linens ’n Things, publicly available research analysts’ estimates and public filings of Linens ’n Things. This analysis indicated the following implied per share equity reference range for Linens ’n Things, as compared to the per share merger consideration:

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      Selected Acquisitions Analysis

      Credit Suisse First Boston reviewed the transaction value multiples in the following 23 selected transactions in the specialty retail industry:

Credit Suisse First Boston compared, among other things, enterprise values in the selected transactions as multiples of the latest 12 months EBITDA. Credit Suisse First Boston then applied a range of selected multiples derived from the selected transactions to corresponding financial data of Linens ’n Things. Multiples for the selected transactions were based on publicly available financial information at the time of announcement of the relevant transaction. Financial data for Linens ’n Things was based on internal estimates of management of Linens ’n Things and public filings of Linens ’n Things. This analysis indicated the following implied per share equity reference range for Linens ’n Things, as compared to the per share merger consideration:

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      Miscellaneous

      The Board of Directors of Linens ’n Things selected Credit Suisse First Boston as financial advisor based on Credit Suisse First Boston’s experience and reputation, and its familiarity with Linens ’n Things and its business. Credit Suisse First Boston is an internationally recognized investment banking firm and is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, leveraged buyouts, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes.

      From time to time, Credit Suisse First Boston and its affiliates in the past have provided, currently are providing and in the future may provide, investment banking and other financial services to Linens ’n Things, as well as certain of the private investment firms whose affiliates are stockholders of Linens Holding Co., and their respective affiliates, unrelated to the merger, for which services Credit Suisse First Boston has received, and expects to receive, compensation. Credit Suisse First Boston and certain of its affiliates and certain of its and such affiliates’ respective employees and certain private investment funds affiliated or associated with Credit Suisse First Boston have invested in funds managed or advised by certain of the private investment firms whose affiliates are stockholders of Linens Holding Co. Credit Suisse First Boston is a full service securities firm engaged in securities trading and brokerage activities as well as providing investment banking and other financial services. In the ordinary course of business, Credit Suisse First Boston and its affiliates may acquire, hold or sell, for Credit Suisse First Boston’s and such affiliates’ own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of Linens ’n Things, Linens Holding Co., affiliates of the stockholders of Linens Holding Co. and any other company that may be involved in the merger and, accordingly, may at any time hold a long or short position in such securities, as well as provide investment banking and other financial services to such companies.

      Credit Suisse First Boston has acted as financial advisor to Linens ’n Things and will receive a customary fee for its financial advisory services that is contingent upon consummation of the merger. In addition, Linens ’n Things has agreed to indemnify Credit Suisse First Boston for certain liabilities, including liabilities arising under the federal securities laws, and other items arising out of the engagement.

Certain Effects of the Merger

      If the merger agreement is adopted by the Company’s stockholders, certain other conditions to the closing of the merger are either satisfied or waived, and Holding has obtained its financing or alternative financing for the merger, Merger Sub will be merged with and into Linens ’n Things, with Linens ’n Things being the surviving corporation. Following the merger, all outstanding securities of Linens ’n Things will be owned by Holding, which in turn will be owned by the equity investors.

      When the merger is completed, each share of Linens ’n Things common stock issued and outstanding immediately prior to the effective time of the merger (other than shares owned by the Company, Merger Sub or Holding or any of their respective direct or indirect wholly-owned subsidiaries or held by stockholders who are entitled to and who properly exercise appraisal rights in compliance with all of the required procedures under Delaware law) will be converted into the right to receive $28.00 in cash, without interest.

      The merger agreement provides that immediately prior to the effective time of the merger, all outstanding options to acquire Linens ’n Things common stock will become fully vested and immediately exercisable. All such options not exercised prior to the merger will be converted into the right to receive an amount in cash, without interest, equal to the product of (1) the total number of shares of Linens ’n Things common stock subject to the option multiplied by (2) the excess of $28.00 over the exercise price per share of Linens ’n Things common stock under the option, from which amount will be withheld any applicable withholding taxes.

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      The merger agreement provides that at the effective time of the merger each right to receive a share of Linens ’n Things common stock pursuant to a restricted stock unit award will be canceled and converted into the right to receive $28.00 in cash, without interest, less applicable withholding taxes.

      At the effective time of the merger, current Linens ’n Things stockholders will cease to have ownership interests in Linens ’n Things or rights as Linens ’n Things stockholders. Therefore, the current stockholders of Linens ’n Things will not participate in any future earnings or growth of Linens ’n Things and will not benefit from any appreciation in value of Linens ’n Things.

      Linens ’n Things common stock is currently registered under the Securities Exchange Act of 1934 and is quoted on the New York Stock Exchange under the symbol “LIN’‘. As a result of the merger, Linens ’n Things will be a privately held corporation, the common stock will cease to be quoted on the New York Stock Exchange and there will be no public market for the common stock. In addition, registration of the common stock under the Exchange Act will be terminated and Linens ’n Things will no longer be required to file periodic reports with the SEC on account of its common stock.

      When the merger becomes effective, the directors of Merger Sub will be the directors of the surviving corporation. Those directors will appoint the officers of the surviving corporation, each to hold office until the earlier of his or her resignation or removal. The surviving corporation’s certificate of incorporation and bylaws will be amended as of the effective time of the merger to read as set forth in exhibits to the merger agreement.

      The benefit of the merger to our stockholders is the right to receive $28.00 in cash, without interest, for each share of Linens ’n Things common stock. The detriments are that our stockholders will cease to participate in our future earnings and growth, if any, and that their receipt of payment for their shares generally will be a taxable transaction for United States federal income tax purposes. See “The Merger—Material United States Federal Income Tax Consequences” on page 41.

      Under the terms of the merger agreement, Holding and Merger Sub have generally agreed to indemnify current officers and directors of the Company for any acts or omissions in their capacity as an officer or director occurring on or before the effective time of the merger and to provide for liability insurance for a period of six years from and after the effective time of the merger, subject to certain conditions.

Effects on the Company if the Merger is Not Completed

      In the event that the merger agreement is not adopted by Linens ’n Things stockholders or if the merger is not completed for any other reason, stockholders will not receive any payment for their shares in connection with the merger. Instead, Linens ’n Things will remain an independent public company and its common stock will continue to be quoted and traded on the New York Stock Exchange. In that event, we expect that management will operate the business generally in a manner similar to that in which it is being operated today and that Linens ’n Things stockholders will continue to be subject to the same general risks and opportunities as they currently are, including, among other things, the nature of the retail industry and economic and market conditions.

      Accordingly, if the merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of Linens ’n Things common stock. From time to time, the Linens ’n Things board of directors will evaluate and review the business operations, properties and capitalization of Linens ’n Things, among other things, make such changes as are deemed appropriate and continue to seek to identify strategic alternatives to enhance stockholder value. If the merger agreement is not adopted by Linens ’n Things stockholders or if the merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to Linens ’n Things will be offered, or that the business, prospects or results of operations of Linens ’n Things will not be adversely impacted.

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      If the merger agreement is terminated, under certain circumstances, we will be obligated to pay the out-of-pocket expenses of Holding and Merger Sub, up to $5 million; and if certain additional circumstances exist, we will be obligated to pay a breakup fee of $27 million to Holding. For a description of the circumstances triggering payment of the breakup fee and reimbursement of Holding’s and Merger Sub’s expenses, see “The Merger Agreement—Breakup Fee” on page 55 and “—Reimbursement of Expenses” on page 55.

Financing of the Merger and Related Transactions

      The total amount of funds necessary to complete the merger and the related transactions is anticipated to be approximately $1,367 million, consisting of (i) approximately $1,295 million to pay Linens ’n Things stockholders, option holders and holders of restricted stock units the amounts due to them under the merger agreement, assuming that no Linens ’n Things stockholder exercises and perfects its appraisal rights, and (ii) approximately $72 million to pay related fees and expenses incurred by Holding and Merger Sub in connection with the merger, the financing arrangements and the other transactions.

      The following arrangements are intended to provide the necessary financing for the merger:

      Equity Financing

      Pursuant to equity commitments from each of Apollo Management V, L.P., NRDC Real Estate Advisors I LLC and Silver Point Capital Fund Investments, LLC, the proceeds of which will constitute the equity portion of the merger financing, the equity investors have agreed to contribute to Holding up to $633.4 million in cash, plus up to an additional $58.0 million, if necessary, to meet the EBITDAR/rent leverage condition in the debt financing commitments. The source of such funds will come from equity contributions from investors in the Apollo, NRDC and Silver Point funds in the ordinary course of business.

      The equity commitments are subject to:

      The equity commitments will terminate upon the earlier of:

      The equity investors have agreed that if we (i) commence a lawsuit within that 90-day period; (ii) establish, in a final, non-appealable judgment, that the termination resulted from Holding’s or Merger Sub’s breach of the merger agreement; and (iii) are awarded damages in respect of that judgment, then the equity investors will be liable to satisfy that judgment, with each equity investor’s liability limited to 20% of its equity commitment, plus the Company's reasonable legal expenses directly related to the enforcement of these rights against the equity investor. This liability constitutes our sole and exclusive remedy against the equity investors for any matter in any way relating to the merger or the merger agreement.

      Debt Financing

      Holding and Merger Sub received debt financing commitments on November 7, 2005 from Bear, Stearns & Co., Inc., Bear Stearns Corporate Lending Inc., UBS Loan Finance LLC and UBS Securities LLC (who we refer to as the debt commitment parties). The debt financing commitments were attached as exhibits to our Form 8-K filed with the SEC on November 9, 2005. Pursuant to the debt financing commitments, and subject to their terms and conditions, Bear

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Stearns Corporate Lending Inc. and UBS Loan Finance LLC have committed to provide, in the aggregate:

      The debt financing commitments expire on April 18, 2006.

      Conditions Precedent to the Debt Financing Commitments

      The availability of the bridge facility and the revolving credit facility are subject, among other things, to satisfaction of the following conditions:

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      The equity investors have committed to invest up to an additional $58.0 million if necessary to satisfy this EBITDAR/rent leverage ratio condition.

      If any portion of the debt financing under the debt financing commitments becomes unavailable, Holding will be required to use its reasonable best efforts to obtain alternative financing on the exact terms and conditions set forth in the debt financing commitments. If Holding is unable to obtain such alternative financing, it will not be obligated to complete the merger because its obligation to close under the merger agreement is conditioned upon it having obtained the debt financing or such alternative debt financing.

      If any of the material conditions to the debt financing are not satisfied, we would not expect the debt commitment parties to waive the conditions and provide the debt financing. If any portion of the debt financing under the debt financing commitments becomes unavailable, Holding will be required to use its reasonable best efforts to obtain alternative financing on the exact terms and conditions provided in the debt financing commitments. Depending on the condition of the retail industry (and of the Company in particular) and the leveraged acquisition debt financing market at such time, it may be difficult, or impossible, for Holding to obtain alternative financing on those exact terms and conditions. In that event, Holding would not be obligated to complete the merger, because its obligation to close under the merger agreement is conditioned upon it having obtained its debt financing or alternative debt financing on those exact terms and conditions. If the merger agreement is terminated as a result, you would not receive any of the merger consideration and your ownership interest in the Company would continue. Alternatively, if Holding is unable to obtain its debt financing and is consequently not obligated to close under the merger agreement, it is possible that Holding and the Company may engage in discussions about entering into a revised transaction on different terms than those in the merger agreement. In that event and if we were to agree to a revised transaction with Holding with price or other material terms or conditions different than those in the merger agreement, we would disclose to our stockholders, among other things, the terms of any such revised transaction and seek stockholder approval of the revised transaction.

      As of the date of this proxy statement, based on improved sales trends, the Company currently believes that it will satisfy the comparable net sales condition to the debt financing. As of the date of this proxy statement the Company also currently believes that it will satisfy the minimum EBITDA condition to the debt financing, although this condition continues to be subject to various risks and uncertainties, including, among other things, year-end audit, absence of any significant audit changes or adjustments and satisfactory completion and results of year-end physical inventory.

      We cannot assure you that we will meet the minimum EBITDA condition, the comparable net sales condition or any other condition to the debt financing.

      Private Offering of Debt Securities

      The issuer of any debt securities will be Merger Sub, initially, and the surviving corporation, upon consummation of the merger. The issuer is expected to issue at least $650 million aggregate principal amount of senior secured or unsecured floating or fixed rate notes. These notes may be

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issued in a public offering or in Rule 144A or other private placement. If these notes are issued in an offering pursuant to Rule 144A, the notes will be offered to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 and to non-U.S. persons outside the United States in compliance with Regulation S under the Securities Act. This proxy statement is not an offer to sell any debt securities and is not soliciting an offer to buy any debt securities.

Bridge Facility

      If Merger Sub is unable to complete a debt securities offering, then it is expected to borrow at least $650 million under the bridge facility. Upon consummation of the merger, the surviving corporation will be the borrower under the bridge facility. If, upon the first anniversary of completion of the merger, any bridge loan has not been previously repaid in full, and provided no conversion default (as defined in the debt financing commitments) exists on such date, the maturity date of the bridge loans will be automatically extended until the eighth anniversary of the closing date and, during the extension period, each holder of a bridge loan will have the right to exchange its bridge loan for a senior exchange note in an equal principal amount, also due on the eighth anniversary of completion of the merger. Bear, Stearns & Co. Inc. has been appointed as sole lead arranger and a joint bookrunner; UBS Securities LLC has been appointed as a joint bookrunner and sole and exclusive syndication agent; and Bear Stearns Corporate Lending Inc. has been appointed as sole and exclusive administration agent for the bridge facility.

Revolving Credit Facility

      The borrower under the revolving credit facility will be Merger Sub, initially, and the surviving corporation, upon consummation of the merger. Of the $600 million revolving credit facility, $150 million will be available in the form of letters of credit to replace outstanding letters of credit of Linens ’n Things and $10 million will be available in the form of letters of credit to secure certain indemnity obligations with respect to the Company’s store leases. UBS Securities LLC has been appointed as sole lead arranger and joint book runner and Bear, Stearns & Co. Inc. has been appointed as joint book runner and as a syndication agent for the revolving credit facility.

Interests of the Company's Directors and Executive Officers in the Merger

      In considering the recommendation of the Company’s board of directors with respect to the merger, you should be aware that some of our directors and executive officers have interests in the merger that may be different from, or in addition to, the interests of our stockholders generally. These interests, to the extent material, are described below. The board of directors was aware of these interests and considered them, among other matters, in approving the merger agreement and the merger.

      Treatment of Stock Options

      As of the close of business on the record date, approximately 2,481,534 shares of our common stock were subject to stock options with an exercise price of less than $28.00 per share, granted under our equity incentive plans to our current executive officers and our directors. Each option that remains unexercised immediately prior to the merger, whether or not it is vested or exercisable, will be canceled, and the holder of the option will be entitled to receive a cash payment, without interest and less applicable withholding taxes, equal to the product of:

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      The following table summarizes the vested and unvested options with exercise prices below $28.00 per share held by our executive officers and directors as of November 30, 2005 and the approximate consideration that each of them will receive pursuant to the merger agreement upon the cancellation of their options, based on the weighted average prices of their options:

      Treatment of Restricted Stock Units

      As of the close of business on the record date, approximately 114,788 shares of our common stock were represented by restricted stock units granted under our equity incentive plans to our current executive officers and our directors. Under the terms of the merger agreement, at the effective time of the merger each restricted stock unit will be canceled, and its holder will receive a cash payment of $28.00 per share, less any required withholding taxes.

      The following table summarizes the restricted stock units held by our executive officers and directors as of November 30, 2005 and the consideration that each of them will receive pursuant to the merger agreement upon the cancellation of the units:

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      Executive Employment Agreements and Transaction Compensation

      The Company has employment agreements with each of its executive officers which contain provisions regarding those executive officers’ rights upon a change in control of the Company (which would include the completion of the merger). The following summarizes the principal terms of these employment agreements with respect to a change in control.

      If an executive’s employment is terminated by the Company other than for cause (as defined in the employment agreements) or if an executive terminates his or her employment for good reason (which generally includes a reduction in responsibilities or compensation, a relocation or a breach of his or her employment agreement by the Company), generally within two years following a change in control, or in the case of Mr. Axelrod if he elects to terminate his employment within a sixty day period beginning six months after a change in control (which would include the completion of the merger), the employment agreements generally provide for (i) a lump sum severance payment equal to two times (2.5 times for Mr. Moore and 2.99 for Mr. Axelrod) the annual base salary and two times (2.99 for Mr. Axelrod) target annual cash incentive compensation, (ii) pro rata annual cash and equity incentive awards at the executive’s target annual incentive compensation rates, payable in a lump sum, (iii) continuation of medical, health and life insurance, at Company cost, until age 60 for Mr. Axelrod (and, at Mr. Axelrod’s cost, from age 60 to age 65) and for a period of 24 months for the other executives, (iv) vesting of outstanding options, restricted stock or stock unit awards, deferred stock awards and long-term or equity incentive awards and (v) in the case of Mr. Axelrod, 36 months of additional service credit under the defined benefit supplemental executive retirement plan. The employment agreements obligate the Company to indemnify the executives to the fullest extent permitted by law, including the advancement of expenses, and reimbursement of expenses incurred in seeking enforcement of an employment agreement unless in bad faith or frivolous. If payments under the employment agreements or pursuant to any other plan, arrangement or award are subject to the golden parachute excise tax, the Company will make an additional gross-up payment sufficient to ensure that the net after-tax amount retained by the executive (taking into account all taxes, including those on the gross-up payment) is the same as it would have been had such excise tax not applied.

      The following table shows the amount of potential cash severance payable to our current executive officers (including, if applicable, pro rata cash and equity incentive compensation for the year of termination), based on an assumed termination date of April 1, 2006 and following completion of the merger. The table also shows the estimated tax gross-up payments to each executive officer.

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      Certain of our executive officers received additional transaction compensation upon execution of the merger agreement, based on the services they provided in connection with the strategic review process leading to the merger, and those executive officers are entitled to certain additional compensation for services to be rendered prior to, and in all events conditioned upon, the closing and completion of the merger. The following table shows for each of these executive officers the amount of the transaction compensation received and the additional amount the executive officer will be entitled to receive for services to be rendered prior to, and in all events conditioned upon, the closing and completion of the merger.

      The Compensation Committee is also authorized, under the terms of the merger agreement, to approve additional transaction compensation of up to $100,000 to one other executive officer conditioned upon and subject to the completion of the merger.

      In addition, certain other individuals who are not executive officers received additional compensation upon the execution of the merger agreement, based on the services provided by them in connection with the strategic review process leading to the merger, and are entitled to certain additional compensation for services to be rendered prior to, and in all events conditioned upon, the closing and completion of the merger. The aggregate amount of this transaction compensation to individuals who are not executive officers will not exceed $385,000 without the consent of Holding.

      Termination of Deferred Compensation Plan and Distribution of Accounts

      At the completion of the merger, which will constitute a change in control under the non-qualified deferred compensation plan in which our executive officers and directors participate, unless otherwise elected by the participant, all balances will be distributed to the participant. All account balances of our executive officers and directors under the plan are vested and have been fully funded by means of a rabbi trust whereby funds equal to the value of the account balances have been set aside in a trust for this purpose (but which is available to satisfy the claims of the Company’s general creditors).

      The following table shows the account balances in the non-qualified deferred compensation plan of our executive officers and directors as of November 30, 2005.

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      Amendment to Qualified Retirement Plan

      We maintain a 401(k) plan for our employees, including our executive officers. Under the terms of the merger agreement, the Company was authorized to, and in December 2005 amended, this plan to provide that all accrued employer contributions to an employee’s account under the plan will be fully vested upon the involuntary termination of the employee’s employment (other than for cause) in the 12 month period following the completion of the merger. Otherwise such accrued contributions will continue to vest in accordance with the existing vesting schedule (100% after three years of service).

      Supplemental Executive Retirement Program

      Mr. Axelrod has a supplemental executive retirement program, or SERP, that is comprised of three components: a defined benefit SERP, a defined contribution SERP and a collateral assignment split dollar arrangement (for which no additional premium payments have been made since 2002). The defined benefit SERP is payable in a lump sum automatically upon a change in control (which includes completion of the merger) whether or not employment is terminated. The defined contribution SERP is payable in a lump sum upon a termination or cessation of employment following a change in control (which includes completion of the merger). The collateral assignment split dollar arrangement is payable in accordance with its terms without acceleration upon a change in control. The following table provides a summary of a general range of amounts that would be payable to Mr. Axelrod assuming, solely for the purposes of this computation, a termination of employment (or a constructive termination for good reason, including his right to terminate within a 60-day period beginning six months following a change in control) as of April 1, 2006. It is based on various assumptions and is intended only to provide a general range for informational purposes. The figures are estimates and will vary regularly based on fund performance. As a result, actual amounts may be higher or lower.

      Indemnification and Insurance

      The merger agreement provides that, for a six-year period following the merger, the surviving corporation will indemnify and provide advancement of expenses to each present and former officer or director of the Company or any of its subsidiaries against all claims, losses, liabilities, damages, judgments, inquiries, fines and reasonable fees, costs and expenses incurred in connection with any action, claim, proceeding or investigation arising out of any acts or omissions made in their capacity as an officer or director at or prior to the time the merger takes effect. The indemnification and advancement of expenses will be to the same extent now provided for in the Company’s certificate of incorporation and by-laws and, if greater, to the fullest extent permitted by law.

      The merger agreement requires the surviving corporation to maintain in effect, for the six-year period following the merger, the Company’s current directors’ and officers’ liability insurance policies with respect to matters occurring prior to the merger or policies with the same coverage with a reputable carrier. However, if the annual expense of this D&O coverage would exceed 300% of the Company’s current annual premiums for D&O insurance, the scope of the policy can be reduced to stay within this 300% cap.

      Prior to completion of the merger, the Company may elect to forgo the annual D&O policy coverage and instead purchase “tail” or “runoff” D&O insurance policies in an amount and scope as favorable as its existing policies and with a claims period of at least six years from the date of the merger, covering claims arising from facts or events that occurred on or prior to completion of the merger. This option is available to the Company only if the total cost for the “tail” or “runoff” coverage does not exceed 300% of the Company’s current annual premiums for D&O insurance.

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Material United States Federal Income Tax Consequences

      The following is a general discussion of certain material U.S. federal income tax consequences of the merger to holders of our common stock. We base this summary on the provisions of the Internal Revenue Code of 1986, as amended, applicable current and proposed U.S. Treasury Regulations, judicial authority, and administrative rulings and practice, all of which are subject to change, possibly on a retroactive basis.

      For purposes of this discussion, we use the term “U.S. holder” to mean:

      A non-U.S. holder is a person (other than a partnership) that is not a U.S. holder.

      This discussion assumes that a holder holds the shares of our common stock as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all aspects of U.S. federal income tax that may be relevant to a holder in light of its particular circumstances, or that may apply to a holder that is subject to special treatment under the U.S. federal income tax laws. Holders that may be subject to special treatment under the U.S. federal income tax laws include:

      In addition, the discussion does not address any tax considerations under state, local or foreign laws or U.S. federal laws other than those pertaining to the U.S. federal income tax that may apply to holders. Holders are urged to consult their own tax advisors to determine the particular tax consequences, including the application and effect of any state, local or foreign income and other tax laws, of the receipt of cash in exchange for our common stock pursuant to the merger.

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      If a partnership holds our common stock, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our common stock, you should consult your tax advisors.

      U.S. Holders

      The receipt of cash pursuant to the merger (or pursuant to the exercise of appraisal rights) by U.S. holders of our common stock will be a taxable transaction for U.S. federal income tax purposes (and may also be a taxable transaction under applicable state, local and foreign tax laws). In general, for U.S. federal income tax purposes, a U.S. holder of our common stock will recognize gain or loss equal to the difference between:

      If the holding period in our common stock surrendered in the merger (or pursuant to the exercise of appraisal rights) is greater than one year as of the date of the merger, the gain or loss will be long-term capital gain or loss. The deductibility of a capital loss recognized on the exchange is subject to limitations under the Code. If a U.S. holder acquired different blocks of our common stock at different times and different prices, the adjusted tax basis and holding period must be determined separately with respect to each block of common stock.

      Under the Code, a U.S. holder of our common stock may be subject, under certain circumstances, to information reporting on the cash received pursuant to the merger (or pursuant to the exercise of appraisal rights) unless the U.S. holder is a corporation or other exempt recipient. Backup withholding will also apply (currently at a rate of 28%) with respect to the amount of cash received, unless the U.S. holder provides proof of an applicable exemption or a correct taxpayer identification number, and otherwise complies with the applicable requirements of the backup withholding rules. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be refunded or credited against a U.S. holder’s U.S. federal income tax liability, if any, provided that the U.S. holder furnishes the required information to the Internal Revenue Service in a timely manner.

      Non-U.S. Holders

      Any gain realized on the receipt of cash pursuant to the merger (or pursuant to the exercise of appraisal rights) by a non-U.S. holder generally will not be subject to United States federal income tax unless:

      An individual non-U.S. holder described in the first bullet point immediately above will be subject to tax on the net gain derived from the merger under regular graduated U.S. federal income tax rates. An individual non-U.S. holder described in the second bullet point immediately above will be subject to a flat 30% tax on the gain derived from the merger, which may be offset by U.S. source capital losses, even though the individual is not considered a resident of the United States. If a non-U.S. holder that is a foreign corporation falls under the first bullet point immediately above, it will be subject to tax on its net gain in the same manner as if it were a United States person as defined under the Code and, in addition, may be subject to the branch profits tax equal to 30% of its effectively connected earnings and profits or at such lower rate as may be specified by an applicable income tax treaty.

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      We believe we are not, have not been and do not anticipate becoming a “United States real property holding corporation” for U.S. federal income tax purposes.

      Information reporting and, depending on the circumstances, backup withholding (currently at a rate of 28%) will apply to the cash received pursuant to the merger (or pursuant to the exercise of appraisal rights), unless the beneficial owner certifies under penalty of perjury that it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that the beneficial owner is a United States person as defined under the Code) or such owner otherwise establishes an exemption. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be refunded or credited against a non-U.S. holder’s U.S. federal income tax liability, if any, provided that the non-U.S. holder furnishes the required information to the Internal Revenue Service in a timely manner.

Regulatory Approvals

      The Hart-Scott-Rodino Antitrust Improvements Act of 1976 and related rules provide that transactions such as the merger may not be completed until the parties submit a Notification and Report Form to the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission and certain waiting period requirements have been satisfied. On December 15, 2005, the Company and Holding each filed its Notification and Report Form and requested early termination of the waiting period.

      The DOJ and the FTC may challenge a merger on antitrust law grounds either before or after expiration of the waiting period. Accordingly, at any time before or after the completion of the merger, the DOJ or the FTC could take action under the United States antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the transaction or to obtain other structural or conduct relief. Other persons could also take action under the United States antitrust laws, including seeking to enjoin the merger. Additionally, at any time before or after the completion of the merger, whether or not the applicable waiting period expired or ended, any state could take action under the antitrust laws as it deems necessary or desirable in the public interest.

      The Competition Act (Canada) provides that transactions which exceed certain thresholds may not be completed until certain information has been submitted to the Commissioner of Competition and certain waiting period requirements have been satisfied or waived, or the Commissioner has granted an Advance Ruling Certificate in respect of the merger. A notification under the Act in respect of the merger may be required. If a notification is required, the obligations of the parties to complete the merger are subject to receipt of an Advance Ruling Certificate stating that the Commissioner is satisfied that there are not sufficient grounds to initiate proceedings under the Act with respect to the merger or, following the filing of notice thereunder or waiver of the notice requirement, the relevant waiting period expires, terminates or is waived and the Commissioner advises that there are not sufficient grounds to initiate proceedings under the Act with respect to the merger.

      The Investment Canada Act (Canada) provides that the merger is subject to the applicable Minister designated under the Act being satisfied that the merger is likely to be of net benefit to Canada, having regard to the factors set out in the Investment Canada Act. On December 9, 2005, Holding filed an application for review under the Act seeking approval of the Minister for the merger.

      The parties believe that the merger does not violate the antitrust laws of the United States or of any other jurisdiction. However, we cannot assure you that the merger will not be challenged on antitrust grounds or that we will prevail if a challenge is made.

      Except as noted above, we are unaware of any material governmental regulatory requirements or approvals required for the completion of the merger.

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Fees and Expenses of the Merger

THE MERGER AGREEMENT

      The summary of the material terms of the merger agreement below and elsewhere in this proxy statement does not purport to be complete and is qualified in its entirety by reference to the merger agreement, which is attached as Annex A to this proxy statement. We encourage you to read carefully the merger agreement in its entirety. The merger agreement has been included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the Company, the equity investors or their respective affiliates. The merger agreement contains representations and warranties that the parties to the agreement made to and solely for the benefit of each other. The assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that the parties exchanged in connection with signing the merger agreement. While the Company does not believe that the disclosure schedules contain non-public information that the securities laws require to be publicly disclosed, the disclosure schedules do contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the merger agreement. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of facts, since (i) they were only made as of the date of the merger agreement or a prior, specified date, (ii) in some cases they are subject to materiality and knowledge qualifiers, and (iii) they are modified in important part by the underlying disclosure schedules. These disclosure schedules contain information that has been included in the Company’s prior public disclosures, as well as non-public information. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the merger agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

Effective Time

      The closing of the merger will occur as soon as practicable but no later than the second business day following the satisfaction or waiver of all of the conditions set forth in the merger agreement (other than those conditions that must be satisfied or waived at the closing, but subject to the satisfaction or waiver of those conditions) or at such other date as the parties may agree. We will file a certificate of merger with the Secretary of State of the State of Delaware on the closing date of the merger. The merger will become effective when that certificate is filed, or at such later time as we and Holding may agree upon and specify in the certificate.

Structure

      At the effective time of the merger, Merger Sub will merge with and into Linens ’n Things. As a result of the merger, the separate corporate existence of Merger Sub will cease and Linens ’n Things will continue as the surviving corporation and as a wholly-owned subsidiary of Holding.

Treatment of Stock Options and Restricted Stock Units

      Options. Immediately prior to the effective time of the merger, all outstanding options to acquire Linens ’n Things common stock will become fully vested and immediately exercisable. All such options not exercised will, immediately following such conversion, be canceled in exchange for the right to receive an amount in cash, without interest and less applicable withholding taxes, equal to the product of:

      Restricted Stock Units. At the effective time of the merger, each outstanding right to receive Linens ’n Things common stock pursuant to a restricted stock unit award, whether or not vested,

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shall be canceled and converted into the right to receive $28.00 in cash, less applicable withholding taxes, without interest.

Exchange and Payment Procedures

      At or prior to the effective time of the merger, Holding will deposit (or cause Merger Sub to deposit) an amount of cash sufficient to pay the aggregate merger consideration with a bank or trust company (the “paying agent”) reasonably acceptable to the Company. As soon as reasonably practicable after the effective time of the merger, the paying agent will mail a letter of transmittal and instructions to the stockholders. The letter of transmittal and instructions will describe to stockholders how to surrender their shares of Linens ’n Things common stock certificates in exchange for the merger consideration.

      Stockholders should not return their stock certificates with the enclosed proxy card, and they should not forward their stock certificates to the paying agent without a letter of transmittal.

      A stockholder will not be entitled to receive the merger consideration until it surrenders its Linens ’n Things common stock certificate or certificates to the paying agent (or to any other agents appointed by Holding), together with a duly completed and validly executed letter of transmittal and any other documents as the paying agent may require. The merger consideration may be paid to a person other than the person in whose name the corresponding certificate is registered if the certificate is properly endorsed or is otherwise in the proper form for transfer. In addition, the person requesting payment must either pay any applicable stock transfer taxes or establish to the reasonable satisfaction of Holding that such stock transfer taxes have been paid or are not applicable. No interest will be paid or will accrue on the cash payable upon surrender of the certificates.

      At the effective time of the merger, the Company’s stock transfer books will be closed, and there will be no further registration of transfers of outstanding shares of Linens ’n Things common stock. If, after the effective time of the merger, certificates are presented to the surviving corporation or the paying agent for transfer or any other reason, they will be canceled and exchanged for the merger consideration.

      None of Holding, Merger Sub, Linens ’n Things or the paying agent will be liable to any person for any cash delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. All funds held by the paying agent for payment to the holders of unsurrendered certificates that are unclaimed 180 days after the effective time of the merger will be returned to Holding. Thereafter, any holder of unsurrendered certificates may look only to Holding for the payment of the funds, subject to any applicable laws. Any cash, dividends or distributions payable in respect of any certificates that are not surrendered will become property of Holding at the time, to the extent permitted by applicable laws.

      If a stockholder has lost a certificate, or if it has been stolen or destroyed, then the stockholder will be required to make an affidavit of that fact before the stockholder will be entitled to receive the merger consideration. In addition, if required by Holding or the surviving corporation, the stockholder will have to post a bond in a reasonable amount determined by Holding or the surviving corporation indemnifying it against any claims made with respect to the lost, stolen or destroyed certificate.

      Each of the surviving corporation and Holding will be entitled to deduct and withhold any applicable taxes from the merger consideration and pay such withholding amount over to the appropriate taxing authority.

Certificate of Incorporation and Bylaws

      The surviving corporation’s certificate of incorporation and bylaws will be amended as of the effective time of the merger to read as set forth in exhibits to the merger agreement.

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Directors and Officers

      After the effective time of the merger, the directors of Merger Sub will be the directors of the surviving corporation. Those directors will appoint the officers of the surviving corporation, each to hold office until the earlier of his or her resignation or removal.

Representations and Warranties

      The merger agreement also contains representations and warranties made by Holding and Merger Sub that are subject, in some cases, to specified exceptions and qualifications, including the occurrence of a material adverse effect. The representations and warranties relate to, among other things:

      We make representations and warranties in the merger agreement that are subject, in some cases, to specified exceptions and qualifications, including the occurrence of a material adverse effect. Our representations and warranties relate to, among other things:

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      The representations and warranties of each of the parties to the merger agreement will expire upon completion of the merger or termination of the merger agreement; however termination does not relieve any party from any liability for any willful and material breach of the merger agreement by that party.

Material Adverse Effect

      For the purposes of the merger agreement, “material adverse effect” means any change, effect, event, occurrence or state of facts that is or would be materially adverse to the business, condition (financial or otherwise), assets, properties or results of operations of Linens ’n Things and its subsidiaries taken as a whole, other than any changes, effects, events, occurrences or state of facts relating to or resulting from:

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Covenants of the Parties

      The merger agreement contains the following mutual covenants:

      The merger agreement also contains covenants of Holding, relating to, among other things:

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      In the merger agreement we covenant to deliver our audited financial statements for the fiscal year ending December 31, 2005 to Holding, Merger Sub and the persons engaged in raising the financing on or before February 28, 2006 and to use our reasonable best efforts to deliver the audited financial statements on or before February 20, 2006.

      In the merger agreement we also covenant that, from the date of the merger agreement until the effective time of the merger, subject to certain exceptions:

      We have also agreed that from the date of the merger agreement until the effective time of the merger, and subject to certain exceptions or except with the prior written consent of Holding, we will not:

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Takeover Proposals

      We have agreed that, subject to the exceptions described below, neither we nor any of our subsidiaries, nor any of our officers, directors, agents or representatives, will, directly or indirectly:

      These restrictions will not prevent the Company or the board of directors from complying with its disclosure obligations under Sections 14d-9 and 14e-2 promulgated under the Securities Exchange Act of 1934 with regard to a takeover proposal or making any disclosure to the Company’s stockholders if the board, in its good faith judgment after consultation with outside counsel, concludes that failure to do so would be a breach of its fiduciary duty under applicable law. However, neither the Company nor the board of directors may recommend that our stockholders tender their shares in connection with a takeover proposal, or withdraw its recommendation that the stockholders adopt the merger agreement, or recommend, adopt or approve a takeover proposal, unless the requirements described in the second paragraph below have been satisfied. Holding will have the right to terminate the merger agreement if the board withdraws, modifies or qualifies its approval of the merger agreement or its recommendation in a manner adverse to Holding in such disclosure documents or communications.

      The Company and the board of directors may, at any time before the merger agreement is adopted by the stockholders, provide information in response to a request for it by, or engage in any negotiations or discussions with, a person who has made an unsolicited bona fide written takeover proposal (under circumstances in which the Company has not violated the relevant provisions of the merger agreement) if the board of directors receives from that person an

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executed confidentiality agreement on customary terms no less favorable to the Company than the confidentiality agreement executed by Holding’s affiliate, if and only to the extent that:

      The Company and the board of directors also may, at any time before the merger agreement is adopted by the stockholders, recommend an unsolicited bona fide written takeover proposal to the stockholders, if and only to the extent that:

      For purposes of the merger agreement, “takeover proposal” means any proposal or offer with respect to:

      For purposes of the merger agreement, “superior proposal” means a bona fide written takeover proposal to acquire 50% or more of the combined voting power of the Company or all or substantially all of the consolidated assets of the Company that is on terms that our board of directors (after consultation with its outside financial advisor) in good faith concludes, after taking into account all legal, financial, regulatory and other aspects of the proposal, the likelihood of obtaining financing, the likely consummation date of the transaction contemplated by the proposal, and the person making the proposal, would, if completed, result in a transaction more favorable to our stockholders from a financial point of view than the transaction contemplated by the merger agreement, taking into account any change in the transaction proposed by Holding within the three business day waiting period.

      Except as permitted above, our board of directors and its committees are not permitted to:

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Conditions to Closing

      The obligations of the parties to complete the merger are subject to the following conditions:

      The obligations of the Holding and Merger Sub to complete the merger are subject to the following additional conditions:

      Our obligations to complete the merger are subject to the following additional conditions:

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      No party to the merger agreement can rely on the failure of any condition to closing to be satisfied if the failure was caused by that party’s failure to comply with its obligations to use its reasonable best efforts to consummate the merger and the other transactions contemplated by the merger agreement.

Termination of the Merger Agreement

      Linens ’n Things, Holding and Merger Sub may agree in writing to terminate the merger agreement at any time without completing the merger, even after the stockholders of Linens ’n Things have adopted the merger agreement. The merger agreement may also be terminated in certain other circumstances, including:

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Breakup Fee

      The $27 million breakup fee is payable to Holding under the following circumstances:

Reimbursement of Expenses

      We must pay Holding for its and Merger Sub’s out-of-pocket expenses up to a maximum of $5 million if we are required to pay the $27 million breakup fee. In addition, we must pay those out-of-pocket expenses up to a maximum of $5 million if the merger agreement is terminated under certain other circumstances, including where the termination is based upon the failure of our stockholders to adopt the merger agreement.

Amendment and Waiver

      The merger agreement may be amended by an instrument in writing signed on behalf of each of the parties at any time, whether before or after stockholder approval. However, after adoption of the merger agreement by the Company’s stockholders, no amendment will be made that by law or stock exchange regulation would require further approval by the Company’s stockholders without such approval having been obtained. The merger agreement also provides that, at any time prior to the effective time of the merger, either party may extend the time for the performance of any obligations or other acts of the other party, waive any inaccuracies in the representations and warranties of the other party or waive compliance with any agreement of the other party or any condition to its own obligations contained in the merger agreement. The failure of any party to the merger agreement to assert any of its rights under the merger agreement will not constitute a waiver of those rights.

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MARKET PRICES OF THE COMPANY’S STOCK

      Our common stock is traded on the New York Stock Exchange under the symbol “LIN.” The following table sets forth the high and low sales prices per share of our common stock on the New York Stock Exchange for the periods indicated.

      The closing sale price of our common stock on the New York Stock Exchange on November 7, 2005, the last trading day before the Company announced the execution of the merger agreement, was $26.40 per share. On December 23, 2005, the last trading day before this proxy statement was printed, the closing price for the Company’s common stock on the New York Stock Exchange was $23.92 per share. You are encouraged to obtain current market quotations for Linens ’n Things common stock in connection with voting your shares.

      No dividends have ever been paid on our common stock, and we are currently restricted by the terms of the merger agreement from paying cash dividends.

APPRAISAL RIGHTS

      Under the DGCL, you have the right to demand appraisal of your shares and thereby to receive payment in cash for the fair value of your common stock of the Company as determined by the Delaware Court of Chancery, together with a fair rate of interest, if any, as determined by the court, in lieu of the consideration to which you would otherwise be entitled pursuant to the merger agreement. These rights are known as appraisal rights. Stockholders electing to exercise appraisal rights must comply with the provisions of Section 262 of the DGCL in order to perfect their rights. We will require strict compliance with the statutory procedures.

      The following is intended as a brief summary of the material provisions of the Delaware statutory procedures you are required to follow in order to perfect appraisal rights. Failure to precisely follow any of the statutory procedures set forth in Section 262 of the DGCL (which are described below) may result in a termination or waiver of your appraisal rights.

      Section 262 requires that stockholders be notified that appraisal rights will be available not less than 20 days before the stockholders’ meeting to vote on the merger. A copy of Section 262 must be included with the notice. This proxy statement constitutes the Company’s notice to its stockholders of the availability of appraisal rights in connection with the merger in compliance with the requirements of Section 262. If you wish to consider exercising your appraisal rights, you should carefully review the text of Section 262 contained in Annex C because failure to timely and properly comply with the requirements of Section 262 will result in the loss of your appraisal rights under Delaware law.

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      If you elect to demand appraisal of your shares, you must satisfy each of the following conditions:

      If you fail to comply with either of these conditions and the merger is completed, you will be entitled to receive the cash payment for your shares of the Company’s common stock as provided for in the merger agreement, but you will have no appraisal rights with respect to your shares of the Company’s common stock.

      All demands for appraisal should be addressed to Linens ’n Things, Attention: Chief Legal Officer, 6 Brighton Road, Clifton, New Jersey 07015, and must be delivered before the vote on the merger agreement is taken at the special meeting. All demands should be executed by, or on behalf of, the record holder of the shares of our common stock and must reasonably inform the Company of the identity of the stockholder and the intention of the stockholder to demand appraisal of his, her or its shares.

      To be effective, a demand for appraisal by a holder of the Company’s common stock must be made by, or in the name of, the registered stockholder, fully and correctly, as the stockholder’s name appears on his or her stock certificate(s). Beneficial owners who do not also hold the shares of record may not directly make appraisal demands to the Company. The beneficial holder must, in such cases, have the registered owner, such as a broker or other nominee, submit the required demand in respect of those shares. If shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal should be made by or for the fiduciary; if the shares are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand must be executed by or for all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner.

      If you hold your shares of the Company’s common stock in a brokerage account or in other nominee form and you wish to exercise appraisal rights, you should consult with your broker or the other nominee to determine the appropriate procedures for the making of a demand for appraisal by the nominee.

      Within 10 days after the effective time of the merger, the surviving corporation must give written notice that the merger has become effective to each stockholder who has properly filed a written demand for appraisal and who did not vote in favor of the merger agreement. At any time within 60 days after the effective time, any stockholder who has demanded an appraisal has the right to withdraw the demand and to accept the cash payment specified by the merger agreement for his or her shares of the Company’s common stock. Within 120 days after the effective date of the merger, any stockholder who has complied with Section 262 shall, upon written request to the surviving corporation, be entitled to receive a written statement setting forth the aggregate number of shares not voted in favor of the merger agreement and with respect to which demands for appraisal rights have been received and the aggregate number of holders of such shares. The surviving corporation must mail that statement within 10 days after receiving the written request for it or within 10 days after expiration of the period for delivery of appraisal demands, whichever is later. Within 120 days after the effective time, either the surviving corporation or any

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stockholder who has complied with the requirements of Section 262 may file a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares held by all stockholders entitled to appraisal. Upon the filing of the petition by a stockholder, a copy of the petition must be served upon the surviving corporation. The surviving corporation has no obligation to file, and has no intention to file, such a petition in the event there are dissenting stockholders. Accordingly, the failure of a stockholder to file such a petition within the period specified could nullify the stockholder’s previously written demand for appraisal.

      If a petition for appraisal is duly filed by a stockholder and a copy of the petition is delivered to the surviving corporation, the surviving corporation will then be obligated, within 20 days after receiving service of a copy of the petition, to provide the Chancery Court with a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares and with whom agreements as to the value of their shares have not been reached by the surviving corporation. After notice to dissenting stockholders who demanded appraisal of their shares, as may be required by the Court, the Chancery Court is empowered to conduct a hearing on the petition, and to determine those stockholders who have complied with Section 262 and who have become entitled to the appraisal rights provided thereby. The Chancery Court may require the stockholders who have demanded appraisal of their shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with that direction, the Chancery Court may dismiss the proceedings as to that stockholder.

      After determination of the stockholders entitled to appraisal of their shares of the Company’s common stock, the Chancery Court will appraise the shares, determining their fair value exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, if any. When the value is determined, the Chancery Court will direct the payment of that value, with interest accrued during the pendency of the proceeding, if the Chancery Court so determines, to the stockholders entitled to receive it, upon the stockholders surrendering the certificates representing those shares.

      In determining “fair value,” the Delaware Court is required to take into account all relevant factors. In Weinberger v. UOP, Inc. the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court has stated that in making this determination of fair value the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts which could be ascertained as of the date of the merger which throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court construed Section 262 to mean that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.” You should be aware that the fair value of your shares as determined under Section 262 could be more than, the same as, or less than the value that you are entitled to receive under the terms of the merger agreement.

      Costs of the appraisal proceeding may be imposed by the Chancery Court upon the surviving corporation and the stockholders participating in the appraisal proceeding as the Chancery Court deems equitable in the circumstances. However, costs do not include attorney and expert witness fees. Each dissenting stockholder is responsible for his or her own attorneys and expert witness fees, although upon the application of a dissenting stockholder, the Chancery Court may order all or a portion of the expenses incurred by any dissenting stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and

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expenses of experts, to be charged pro rata against the value of all shares entitled to appraisal. Any stockholder who had demanded appraisal rights will not, after the effective time of the merger, be entitled to vote shares subject to that demand for any purpose or to receive payments of dividends or any other distribution with respect to those shares, other than with respect to payment as of a record date prior to the effective time; however, if no petition for appraisal is filed within 120 days after the effective time of the merger, or if a stockholder delivers a written withdrawal of his or her demand for appraisal and an acceptance of the terms of the merger within 60 days after the effective time of the merger, then the right of that stockholder to appraisal will cease and that stockholder will be entitled to receive the cash payment for shares of his, her or its Company common stock pursuant to the merger agreement. Any withdrawal of a demand for appraisal made more than 60 days after the effective time of the merger may only be made with the written approval of the surviving corporation. No appraisal proceeding may be dismissed as to any stockholder without the approval of the Court of Chancery, and such approval may be conditioned upon such terms as the court deems just.

      In view of the complexity of Section 262, the Company’s stockholders who may wish to dissent from the merger and pursue appraisal rights are encouraged to consult their legal advisors.

ADJOURNMENT OF THE SPECIAL MEETING

      Linens ’n Things is asking its stockholders to vote on a proposal to adjourn the special meeting if necessary to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement.

SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS

      The information below is based on a review of all statements on Schedules 13D and 13G filed with the SEC, except as otherwise known by the Company. As of December 15, 2005,  45,387,264 shares of common stock of the Company were outstanding and, as of such date, these stockholders have reported the following ownership of shares of the Company’s common stock, which represents the following percent of outstanding shares of the Company’s common stock as of that date:

      (1) Pursuant to an amended Schedule 13D filed on November 10, 2005, Jakup a Dul Jacobsen has shared voting and shared dispositive power with respect to 6,149,400 shares; Lagerinn ehf has shared voting and shared dispositive power with respect to 6,149,400 shares; Kaupthing Bank hf. has shared voting and shared dispositive power with respect to 6,149,400 shares; and TF Holding P/F has shared voting and shared dispositive power with respect to 1,537,350 shares. The address for Jakup a Dul Jacobsen is c/o Lagerinn at Sundaborg 7, 104 Reykjavik, Republic of Iceland. The address for Lagerinn ehf is Sundaborg 7, 104 Reykjavik, Republic of Iceland. The address for Kaupthing Bank hf. is Borgartun 19, IS-105 Reykjavik, Republic of Iceland. The address for TF Holding P/F is Kongabrugvin, Post Box 329, FO 110 Torshavn.

      (2) Pursuant to an amended Schedule 13G filed on March 10, 2005, PRIMECAP Management Company has sole voting power with respect to 2,247,773 shares and sole dispositive power with respect to 5,036,773 shares. The address for PRIMECAP Management Company is 225 South Lake Avenue # 400, Pasadena, California 91101.

      (3) Pursuant to an amended Schedule 13G filed on February 11, 2005, Mellon Financial Corporation has sole voting power with respect to 2,895,659 shares and sole dispositive power with

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respect to 3,150,234 shares. The address for Mellon Financial Corporation is One Mellon Center, Pittsburgh, Pennsylvania 15258.

      (4) Pursuant to an amended Schedule 13G filed on February 11, 2005, Vanguard Horizon Funds - Vanguard Capital Opportunity Fund has sole voting power with respect to 2,300,000 shares, and its address is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.

BENEFICIAL OWNERSHIP OF COMMON STOCK

      The following table shows the ownership of Linens ’n Things common stock as of December 15, 2005 by (1) each director, (2) each executive officer, and (3) all executive officers and directors as a group. Unless otherwise indicated, each of the stockholders has sole voting and investment power with respect to the shares beneficially owned.