ShopKo Stores, Inc. announced that it signed a definitive merger agreement to be acquired by an affiliate of Minneapolis-based private equity investment firm Goldner Hawn Johnson & Morrison Inc. The acquisition is valued at slightly more than $1 billion, which includes assumed debt of approximately $330 million and about $715 million in share buyout. The transaction assumes 29.8 million shares outstanding valued at $24.00 per share. The deal is expected to be completed in ShopKo's second fiscal quarter of 2005.
SKO shares were up 17.3% for the week to close at $26.02 on Friday.
ShopKo's current chairman of the board, Jack Eugster, has resigned his position as COB of directors and his board committee positions, effective immediately, but will remain on the board while the transaction is pending. Mr. Eugster is expected to serve as chairman of the board as well as acting chief executive officer until a new one is named.
ShopKo's current president and chief executive officer, Sam Duncan, has indicated that he will not remain with ShopKo following the transaction. Other members of SKO's senior management team are expected to remain in place and may invest in the company.
