Bed Bath said it was planning to raise just over $1 billion through sales of preferred stock and warrants and from securities when the warrants are exercised.
Bed Bath will receive a waiver on its recent bank default should the proposed offering succeed, the company said.
Bed Bath & Beyond also appointed Holly Etlin, a bankruptcy expert, as interim chief financial officer.
"It’s a similar situation in which a deeply financially distressed company is attempting to sell securities," said Lynn LoPucki, a professor at the University of Florida.
Sources have told Reuters that Bed Bath & Beyond has lined up liquidators to close additional stores unless a last-minute buyer emerges.