Advertisement
YOU ARE HERE: LAT HomeCollectionsBusiness

99 Cents Only stock jumps on expectations of new buyout offer

Private equity firm Apollo Global Management has been courting 99 Cents Only and plans to make an offer for the chain, according to a news report.

August 23, 2011|By Andrea Chang, Los Angeles Times
  • 99 Cents Only Stores sells discounted items at 286 stores in four states. Above, a shop in Los Angeles.
99 Cents Only Stores sells discounted items at 286 stores in four states.… (Annie Wells, Los Angeles…)

Shares of 99 Cents Only Stores Inc. surged Monday after a report that the City of Commerce discount chain would receive a new buyout offer.

The company's stock rose $1.42, or 8.6%, to $18.

Private equity firm Apollo Global Management has been courting 99 Cents Only and plans to make an offer for the chain, according to a news report.

The bid would rival a $1.3-billion buyout proposal that 99 Cents Only received in March from the company's founding family and a Los Angeles investment firm.

Investors viewed the March bid as too low and quickly pushed the stock price beyond the $19.09 a share offered by the Schiffer/Gold family and Leonard Green & Partners to take the chain private. At the time, several industry analysts said they had expected a higher offer to emerge for the company, which sells discounted household items at 286 stores in four states.

The Schiffer/Gold family currently controls one-third of the retailer's shares, and it is prepared to support the highest bidder, the New York Post said in a story Sunday, citing unnamed sources.

Dollar stores have been attractive takeover targets lately as the chains have taken market share away from major big-box discounters such as Wal-Mart Stores Inc. and Target Corp., especially in urban areas.

In its most recent quarter, 99 Cents Only reported that sales at stores open at least a year rose 5.9%. Profit totaled $17.7 million, or 25 cents a share, compared with $16.8 million, or 24 cents, a year earlier.

99 Cents Only Chief Executive Eric Schiffer did not return calls seeking comment Monday. An Apollo spokeswoman declined to comment.

andrea.chang@latimes.com

Advertisement
Los Angeles Times Articles
|
|
|