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99 Cents sold to Ares, CPPIB

by Lou Whiteman  |  Published October 11, 2011 at 1:27 PM
Discounter 99 Cents Only Stores Inc. on Tuesday agreed to be sold for $1.6 billion to Ares Management LLC and Canada Pension Plan Investment Board, completing a sale process begun last March when the company was approached by Leonard Green & Partners LP.

Terms of the deal call for the funds to pay $22 per share for City of Commerce, Calif.-based 99 Cents, besting Leonard Green's $19.09 per share bid. The deal price offers a premium of more than 30% over the company's trading price before Leonard Green went public with its offer.

Company CEO Eric Schiffer, president Jeff Gold and executive vice president Howard Gold will continue in their current roles after the deal closes. Members of the Gold and Schiffer families have committed to support the offer and will continue to hold a significant minority stake after the deal closes.

The families were initially aligned with Leonard Green when it submitted its original $1.34 billion offer. The company's board formed a special committee after receiving that initial offer, and eventually concluded that the Ares-CPPIB offer was in the best interest of all shareholders.

Schiffer in a statement said: "We have come to know and respect Ares Management and CPPIB through this process, and we believe they will be excellent partners and help us achieve our long-term goals as a company. We look forward to continuing to deliver extreme value to our customers and providing a great place to work for our 99ers."

99 Cents Only operates 289 discount retail locations in Arizona, California, Nevada and Texas. The company, which was founded in 1982, is among a handful of discounters that have benefited from the weak economy. The deal is subject to approval by a majority of the company's outstanding shares, and is expected to close in early 2012.


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Tags: 99 Cents Only Stores Inc. | Ares Management LLC | Canada Pension Plan Investment Board | Leonard Green & Partners LP | private equity

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