Leonard Green Reports 4.8% Stake In 99 Cents Only Stores
March 16 2011 - 5:53PM
Dow Jones News
Leonard Green & Partners LP late Wednesday disclosed a 4.8%
stake in 99 Cents Only Stores (NDN), the discount chain of stores
it proposed to take private with the aid of the company's founding
family late last week.
Green has been on an acquisitive streak in retail of late,
recently completing its buy of clothier J. Crew. The private equity
firm bought just under 3.4 million shares of 99 Cents Only between
June and August last year, paying $51.7 million, or an average
price of about $15.34 apiece.
Green and the Schiffer/Gold family, which includes 99 Cents Only
Chairman David Gold and his son-in-law, Chief Executive Erik
Schiffer, have proposed buying the company Gold and his wife
founded for $19.09 a share, or about $1.37 billion in total. The
Schiffer/Gold family together own roughly a third of 99 Cents
Only.
The Schiffer/Gold family would contribute its equity to the
proposed deal, and its stake in the chain would be enlarged.
The price for the chain of nearly 300 stores tops by 2 cents a
share its October high and represented the highest level since
2004, but Wall Street promptly bid the stock higher, and it closed
Wednesday at $19.52.
According to a filing with the Securities and Exchange
Commission, Green entered into a confidentiality agreement with the
company on Jan. 27 in order obtain information it needed to
evaluate the transaction with the Schiffer/Gold family. With the
agreement, Green agreed not to acquire any shares of the company
for 18 months without permission from the company.
On Friday, investor FBR Capital Markets, which owns 5.4% of 99
Cents Only, issued a filing to say it believes the proposed deal
"substantially" undervalues the company. FBR said it would "closely
monitor the company's response to the transaction proposal" to make
sure the special committee of the 99 Cents Only board of directors
that is evaluating the proposal is "a truly independent special
committee that acts at all times in a manner consistent with the
fiduciary duties owed by the board to the company's
shareholders."
-By Maxwell Murphy, Dow Jones Newswires; 212-416-2171;
maxwell.murphy@dowjones.com
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