GREEN BAY, Wis. – ShopKo Stores Inc., a discount retailer of general merchandise primarily in the Midwest, agreed to be sold to a private equity firm in Minneapolis in a deal the company valued Friday at about $715 million, excluding debt.
An affiliate of Goldner Hawn Johnson & Morrison Inc. will pay $24 for each ShopKo share outstanding, SkopKo said. Based on ShopKo’s 2.98 million shares outstanding, excluding options, the deal is valued at $715.2 million. The Goldner Hawn affiliate will also assume about $330 million in ShopKo debt.
Investors pushed ShopKo shares well above the offering price Friday on the New York Stock Exchange. The stock rose $2.99, or 13 percent, to close at $26.02.
John Vigeland, a ShopKo spokesman at company headquarters in Green Bay, said the sale to a private company would allow ShopKo to focus more on customers and service and less on Wall Street, open up new doors for financing and permit the company to “move more rapidly to the ever-changing retail climate out there.”
He said the company didn’t plan to compete head-to-head against Wal-Mart Stores Inc., the world’s largest retailer.
“That is not our goal. No one can do that. But we do believe there is a place for ShopKo in the market for people who don’t go to Wal-Mart, who don’t go to Target,” he said. “We have shown improvement in the last few months.”
The ShopKo transaction is expected to close in the second quarter. On Thursday, ShopKo said its same-store sales declined slightly in March, hurt by a slump in business at its ShopKo locations that offset a gain in sales at its Pamida stores.
The company runs 140 ShopKo stores in larger cities, including 42 in Wisconsin.