Linens 'n Things Inc. (LIN) expects to meet sales and profitability targets required to finance its deal to be acquired by a private equity firm and its partners, the home decor retailer said late on Tuesday.

Analysts had questioned for weeks whether the retailer would satisfy the criteria for completing the $1.3 billion deal to be taken over by Apollo Management L.P. and its affiliates, citing weak sales trends.

Linens 'n Things said sales have improved, however, and it set a January 30 special shareholder meeting to vote on the $28-per-share deal. The record date is December 15.

Shares of Linens 'n Things closed at $23.91 on the New York Stock Exchange on Tuesday, nearly a 15 percent discount to the takeover price, reflecting investors' concerns that the deal may not go through.

Under the terms of the Apollo deal, financing is contingent upon Linens 'n Things reporting a fourth-quarter comparable sales decline of no more than 6 percent, and earnings before interest, taxes, depreciation and amortization of not less than $140 million.

Analysts had said the retailer may miss those targets after several quarters of disappointing sales. Linens 'n Things faces stiff competition from larger rival Bed Bath & Beyond Inc. (BBBY) and discounters such as Target Corp. (TGT), which have expanded home decor offerings.

The retailer said the profitability condition "continues to be subject to various uncertainties" including a year-end audit and completion of its year-end inventory.

"There can be no assurances that such conditions will be satisfied," Linens 'n Things said.

In a proxy statement filed with the U.S. Securities and Exchange Commission and dated Wednesday, the retailer said it was working to complete the deal by late in the first quarter or early in the second.