99 Cents Only Stores agrees to $1.6-billion buyout offer
99 Cents Only Stores Inc. has agreed to be taken private in a deal valued at about $1.6 billion, the City of Commerce deep-discount retailer said Tuesday, after months of talks with several groups interested in buying the company.
The chain said it had agreed to be acquired by Los Angeles private equity firm Ares Management and the Canada Pension Plan Investment Board for $22 a share in cash, a 7.4% premium to Monday’s closing price of $20.49.
The price is also 32% higher than the stock’s close on March 10, the day before it announced that it had received a $1.3-billion buyout proposal from Los Angeles investment firm Leonard Green & Partners and 99 Cents Only’s founding family. The market viewed that $19.09-a-share bid as a lowball offer, and investors quickly pushed the stock above that level.
The company’s shares Monday morning were trading at $21.39, up 90 cents, or 4.4%, from Monday’s close.
99 Cents Only said the family of company founder David Gold had approved the Ares offer and would continue to hold a significant minority stake. Chief Executive Eric Schiffer, along with his brothers-in-law Jeff Gold, the company’s president, and Howard Gold, executive vice president, would remain in their positions and serve as directors. David Gold would serve as chairman emeritus.
-- Andrea Chang, Los Angeles Times
Photo: A 99 Cents Only store in Los Angeles. Credit: Irfan Khan / Los Angeles Times