Major retailer K mart Corp. will purchase Pace Membership Warehouse Inc. for about $322 million under an agreement announced Monday.
The board of Pace has approved the agreement and recommended that stockholders tender their shares, K mart and Pace said in a joint statement. K mart is to pay $23 a share.
The acquisition of Pace would expand discounter K mart's business in warehouse-style retailing. K mart already has a warehouse club chain, Makro Inc., with six outlets in the Cincinnati, Washington, Philadelphia, Baltimore and Cleveland areas. Pace and Makro will continue to be operated under their present managements.
"The membership-warehouse concept has great potential, and the long-term prospects for Pace Membership Warehouse and its employees will be enhanced by the affiliation with K mart," said Joseph E. Antonini, K mart's chairman and chief executive, and Wayne H. Patterson, Pace's chairman.
Pace, based in Aurora, Colo., has 41 outlets in California, Colorado, Florida, Georgia, Iowa, Kentucky, Maryland, Michigan, Nebraska, North Carolina and Pennsylvania. The company reported revenue of $1.3 billion for 1988.
K mart has 4,150 stores in the United States, Puerto Rico and Canada, including 2,283 K mart discount stores, 1,247 Waldenbooks shops, 279 Pay Less Drug stores and 141 Builders Square outlets.