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Hechinger and Builders Square May Merge

June 19, 1997|(Washington Post)

Hechinger Co., a chain of home improvement stores, is considering a takeover offer from Leonard Green, a Los Angeles investor who wants to combine the Largo, Md.-based company with the national home improvement chain Builders Square, Hechinger store managers said. Hechinger executives have not agreed to a sale of the struggling 117-store chain, but several store managers said they were told by executives in a conference call that if an agreement is reached, it will be announced in six to 10 days. Hechinger executives declined to provide details. Hechinger said Tuesday it was considering a sale to an unidentified buyer for $3 a share, which amounts to $127 million for all of Hechinger's stock. If the buyer were to assume Hechinger's debt, the deal would be worth more than $500 million. Green purchased PayLess Drug Stores from Kmart Corp.--which also owns Builders Square--for $1.2 billion and combined it with Thrifty Corp., a Los Angeles-based drugstore chain he bought for $500 million in 1992. Green sold the combined entity to Rite Aid last year for $2.4 billion. Hechinger shares rose 12.5 cents to close at $2.375 on Nasdaq.

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