This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

99 Cents Sells; Dollar is Too Pricey: Deals to Watch

Stocks in this article: NDN DTG HTZ FDO CAR BJ WMT TGT

NEW YORK ( TheStreet) -- 99-Cent Only Stores (NDN) said Tuesday that it agreed to be acquired by private equity firm Ares Management and the Canadian Pension Plan for $1.6 billion or $22 a share in cash, a 32% premium to its closing price on March 10 when a separate takeover solicitation was first announced.

The dollar store, founded by the Gold family in 1982, will still have the family-owners as significant minority shareholders after the acquisition, according to a press release announcing the deal. 99-Cent Only Stores shares rose over 4% to 21.40 in early trading, still slightly below the offer price.

In March, private equity firm Leonard Green & Partners offered the Commerce, Calif.,-based dollar store $19.09 a share, in a nearly $1.34 billion deal. Since the first bid, the Gold family and 99-Cent Only Stores formed a special committee to evaluate other potential bids. Meanwhile, shares have consistently traded above the price of the Leonard Green & Partners bid signaling investors anticipated a new buyer might emerge at a higher price. Ares and CPPIB's bid came on the heels of Nelson Peltz's Trian Fund Management's $7.7 billion February bid for Family Dollar Stores (FDO) -- that has recently ended without a takeover.

At $1.6 billion, the deal is the 20th largest private equity buyout offer this year in the retail sector according to data compiled by Bloomberg, and it's a sign that even with volatile markets and a pullback in credit some deals still can get done. With consumer spending recently reported to have fallen 2% in 2010, it's also a signal that low-priced retailers are still acquisition targets after Family Dollar Stores (FDO) and BJ's Wholesale Club (BJ) received private equity bids at prices above $2 billion. Unlike some bids like Peltz's interest in Family Dollar, 99-Cent Only Stores shows that there are still interested sellers.

With the surfacing of Ares and CPPIB as bidders, the 99-Cent only takeover seems to be on better terms than Trian's push for Family Dollar. "I am pleased to announce this agreement as it delivers significant value to our shareholders," said Eric Schiffer, CEO of 99-Cent Only Stores in a press release announcing the deal. Schiffer added, "We have come to know and respect Ares Management and CPPIB through this process and we believe they will be excellent partners and help us achieve our long term goals as a company." It's a company that is selling at a time of economic uncertainty, which might be a boost to its sales and profit prospects.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs