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GREEN BAY, Wis. -- Following a pattern of steadily declining comps, regional discount store operator ShopKo Stores, Inc. here has agreed to be acquired by a private equity firm in a deal valued at slightly more than $1 billion, which includes assumed debt of approximately $330 million.
ShopKo said Friday an affiliate of Minneapolis-based private equity investment firm Goldner Hawn Johnson & Morrison Inc. will pay $24 for each ShopKo share outstanding. ShopKo currently has approximately 29.8 million shares of common stock outstanding, excluding options.
The news buoyed ShopKo shares well above the offering price in early activity on the New York Stock Exchange. Its stock price closed Friday at $26.02, a 13 percent increase.
ShopKo, which operates the ShopKo and Pamida chains and has been dabbling in food retailing at some stores, also said chairman Jack Eugster has resigned, and board members John Turner and Steve Watson have been named co-chairmen. Eugster will remain a board member while the transaction is pending.
ShopKo also said president and c.e.o. Sam Duncan will not remain with the company following the transaction, but it added, "other members of ShopKo's senior management team are expected to remain in place and may invest in the company."
The transaction is expected to close in the second quarter.
ShopKo Stores, Inc. operates about 140 stores located throughout the Midwest, Mountain, and Pacific Northwest regions.