Pathmark Stockholders Approve Yucaipa Investment
June 09 2005 - 2:16PM
Business Wire
Pathmark Stores, Inc. (Nasdaq:PTMK) announced that its stockholders
approved The Yucaipa Companies LLC $150 million investment in
Pathmark at a Special Meeting of Stockholders held here today. Of
the 21.9 million shares voted, over 83% voted in favor of the
proposal. The transaction is expected to close shortly. Eileen
Scott, Chief Executive Officer of Pathmark said, "We are pleased
with the support shown by our stockholders for the agreement with
Yucaipa. With the new investment and Yucaipa's industry expertise,
Pathmark will be in a strong position to pursue opportunities to
create meaningful value for stockholders and better serve our
customers. We are energized and confident as we move forward to
realize the great potential of this partnership." "The results from
today's meeting show that Pathmark stockholders clearly recognize
the compelling strategic and economic benefits of this
transaction," said Yucaipa's founder, Ron Burkle. "Pathmark has
tremendous assets on which to build, and we are eager to work with
the Pathmark team to help the Company capitalize on its strong
market position and competitive advantages." Under the terms of the
agreement announced on March 24, 2005, The Yucaipa Companies LLC, a
Los Angeles based private equity firm, will purchase from Pathmark
20,000,000 newly-issued shares of the Company's common stock,
Series A warrants to purchase 10,060,000 shares of the Company's
common stock and Series B warrants to purchase 15,046,350 shares of
the Company's common stock for an aggregate purchase price of $150
million in cash. The 20,000,000 shares will represent approximately
40% of Pathmark's outstanding common stock. The Series A warrants
have an exercise price of $8.50 per share and a three-year term and
the Series B warrants have an exercise price of $15.00 per share
and a ten-year term. Pathmark is a regional supermarket chain
currently operating 142 supermarkets primarily in the New York -
New Jersey and Philadelphia metropolitan areas. Pathmark's stores
average 52,400 square feet in size and include 129 in-store full
service pharmacies and a wide array of financial services offered
by 82 in-store banks. Additional information about Pathmark may be
found at its website, www.pathmark.com. Founded in 1986, The
Yucaipa Companies LLC, has completed mergers and acquisitions
valued in excess of $30 billion. Yucaipa is widely recognized as a
leader in acquisitions, mergers and management of large retail and
distribution entities. As a hands-on investor, the company works
with management to strategically reposition businesses and
implement operational improvement, resulting in value creation for
investors. Specific investments by Yucaipa in the Supermarket
sector have included Food4Less, Dominick's, Ralphs Grocery Co.,
Smith Food and Drug, and Fred Meyer. This press release contains
certain "forward-looking statements" that are subject to risks and
uncertainties and could cause actual results to differ materially.
For these statements, the Company claims the protection of the safe
harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. Factors that may affect
results include changes in business and economic conditions
generally and in the Company's operating areas, the competitive
environment in which the Company operates and other risks detailed
from time to time in the Company's reports and filings available
from the Securities and Exchange Commission.
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