CITY OF COMMERCE (AP) — Discount store operator 99 Cents Only Stores has received a proposal to take the company private from the company’s founding family and investment firm Leonard Green & Partners LP for $19.09 per share.
The offer would value the company at about $1.3 billion.READ MORE: Southern California Welcomes Autumn Rain, Cooler Temperatures
99 Cents said the would-be acquirers include the Schiffer-Gold family, which owns about 33 percent of its outstanding stock. David Gold is company founder and chairman. His son-in-law Eric Schiffer is CEO.
The chain’s stock jumped $3.30, or 19.8 percent, to $19.98 in premarket trading on Friday.
In a letter sent to the company, the family indicated that it is ready to contribute a “substantial portion” of its existing stock ownership as part of the proposed acquisition. The letter also says the family has not made any commitment of exclusivity with Leonard Green related to the proposal.READ MORE: Federal Investigators Name MSC DANIT As 'Party In Interest' As Lawmakers Intensify Scrutiny Of Coastal Offshore Drilling
99 Cents said its board has yet to evaluate the proposal and that there is no guarantee a definitive offer will be made.
The Commerce, Calif., company said it expects to create a special committee comprised of independent board members to assess the bid.
Leonard Green has set its sights on retail buyouts recently. It was part of the $3 billion J. Crew buyout, along with TPG Capital, that closed on Monday. The Los Angeles firm has also offered $1.6 billion for fabric and craft store chain Jo-Ann Stores Inc. and has reportedly expressed interest in buying warehouse club operator BJ’s Wholesale Club Inc.
99 Cents currently runs 283 stores, with 210 stores in California, 34 in Texas, 27 in Arizona, and 12 in Nevada.MORE NEWS: Colin Powell, First Black Secretary Of State, Dies At 84 Of Complications From COVID-19
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