99 Cents Only Stores are Selling for $1.6 Billion
99 Cents Only Stores Inc. has agreed to be sold in a deal amounting to a whopping $1.6 billion, several international websites reported on Tuesday.
Two companies expressed their interest to acquire 99 Cents Only Stores because they believe the deep-discount retailer is growing in popularity in the US specially during the economic downturn.
Affiliates of the investment firm Ares Management LLC and the Canada Pension Plan Investment Board have offered to buy the retailer's stock for $22 per share in cash, 99 Cents Only Stores said in a statement.
The deal must be approved by 99 Cents Only Stores shareholders. The retailer's board has a positive response on the offer and the deal is expected to close in the first quarter of 2012.
"There's been tons of chatter for some time about takeovers for various dollar stores, in many instances, they can offer good returns" said Matt Arnold, an analyst at Edward Jones & Co.
The $22-a-share offer for 99 Cents Only Store is about 32% higher than the stock's close March 10, the day before it announced it had received a $1.3-billion buyout proposal from Los Angeles investment firm Leonard Green & Partners.
99 Cents Only Stores have profited significantly as the recession compelled shoppers to seek better bargains.
The investors are planning to take the brand outside of California and Texas, where most of the stores are at this point. And as they add more branches, they'll be adding more people along the way.
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