99 Cents Takes $1.6B Ares Buyout Deal

(Reuters) – Ares Management LLC and Canada Pension Plan Investment Board agreed to buy 99 Cents Only Stores (NDN.N) for about $1.6 billion in cash, topping a rival offer by private equity firm Leonard Green & Partners.

Ares Management is teaming up with the members of the Schiffer/Gold family, who are the biggest shareholders in the company, to offer $22 a share for the retailer, compared with Leonard Green’s $19.09 bid.

The latest offer represents a 32 percent premium to the stock’s trading levels prior to Leonard Green’s offer, which was made in March.

In March, the Schiffer/Gold family said it was joining hands with Leonard Green to offer $1.34 billion to take the discount chain private, an offer some analysts said was too low.

There have been media reports of possible interest by private equity firm Apollo Management as well, but the New York Post reported last week that Apollo dropped out of the race for the dollar chain.

Last week, a source told Reuters that 99 Cents received a takeover offer from Ares Capital.

Eric Schiffer will continue as its Chief Executive and Jeff Gold as its President and operation head after the deal, the company said in a statement on Tuesday.

The Schiffer/Gold family will continue to hold a significant minority stake in the company.

(Reporting by Meenakshi Iyer and Mihir Dalal in Bangalore; Editing by Saumyadeb Chakrabarty)