99 cents agrees to $1.6 billion Ares, Canada pension buyout

99 Cents Only Stores, the operator of 289 U.S. discount shops, agreed to be acquired by Ares Management LLC and Canada Pension Plan Investment Board for about $1.6 billion in cash.

Members of the founding Gold/Schiffer family support the $22-a-share offer and will continue to hold a minority stake in the company, City of Commerce, California-based 99 Cents said today in a statement.

99 Cents Only had considered a buyout and other options since April, a month after Leonard Green & Partners LP and the founding family offered to take it private for about $1.34 billion. Dollar stores have become takeover targets as they lure consumers who prefer quicker trips and smaller shops than Wal- Mart Stores Inc. locations when buying items such as toothpaste and packaged foods.

The dollar-store chain, led by Chief Executive Officer Eric Schiffer, said it had $221.8 million in cash and marketable securities and no debt at the end of its fiscal first quarter. Sales in the period advanced 6.3 percent to $368.3 million.

99 Cents shares rose 4.3 percent to $21.36 at 9:51 a.m. New York time. Before today, the shares had climbed 23 percent since March 10, the day before the company disclosed the offer from Leonard Green.

Michael Gennaro, chief operating officer of Los Angeles- based Leonard Green, didn't immediately reply to a telephone message left before regular business hours.

Family Dollar Stores Inc. last month named Edward P. Garden, chief investment officer of Nelson Peltz's Trian Fund Management LP, to its board after Trian withdrew a $7.7 billion takeover offer for the second-largest U.S. dollar store chain.

--Editors: Kevin Orland, James Callan

To contact the reporter on this story: Chris Burritt in Greensboro at cburrittbloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajellobloomberg.net