Shareholders Buy ShopKo Deal
Staff Staff -- Furniture Today, January 2, 2006
Green Bay, Wis. —Sprinting toward the finish line after a long-running and hotly contested takeover contest, shareholders of heartland discounter ShopKo Stores Inc. overwhelmingly approved the sale of the company to an affiliate of Sun Capital Partners Inc., a private investment firm, in a deal valued at about $877 million.
About 96.5 percent of shareholders who participated in the special ballot held Friday, Dec. 23, voted in favor of the deal that will pay them about $29 a share for their stock. In addition, shareholders will receive a modest bonus, an increase in the per share stock price at a rate of six percent a year, prorated for each day, beginning Dec. 15, 2005, through the closing date of the merger. The deal was expected to close by the end of 2005, but the retailer said it could be delayed by the heavy volume of year-end business.
“Today we begin an exciting new chapter in the history of ShopKo,” said Paul White, acting co-CEO. “Our new organization will be a healthy, more vibrant company and stronger in every aspect of our business than we would have been had we remained on our own.”
The deal marked the second time this year that the troubled retailer agreed to sell itself. In April, shareholders agreed to be bought out by another investment firm, Golder Hawn Johnson and Morris, but that deal stalled out when some shareholders objected, seeking more than the offer price of $24.50 a share. ShopKo will now pay the spurned suitor a $13.5 million break-up fee.
ShopKo was founded in 1962, and by the end of this year had grown to 137 units. In 1991 it became a public company, and in 1999 acquired Pamida Stores, a chain of small neighborhood convenience stores targeting small, rural communities in the Midwest.
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