99 Cents Stores (NDN) Agrees to Takeover Bid

A bid by Ares Management LLC and Canada Pension Plan Investment Board of approximately $1.6 billion in cash for 99 Cents Only Stores (NYSE:NDN) has been approved by the company. The company has been searching for a buyer for about half a year.

99 Cents Only Stores number 289 in the United States, and has the backing of the founding Gold/Schiffer family.

A sale of the company has been on the table since April, when the Gold/Schiffer family and Leonard Green & Partners LP made a $1.34 billion offer to take the company private. Another offer isn't expected from the two, as the current offer is considered to accurately value the company.

According to Chief Executive Officer Eric Schiffer, as of the end of the fiscal first quarter of the company, it is debt free, with sales of $368.3 million, an increase of 6.3 percent.

Smaller discount stores are increasingly major competitors to Wal-Mart (NYSE:WMT), which for many consumers has become too large for them; taking too much time to shop there. This is why Wal-Mart is beginning to incorporate smaller stores into its retail arsenal in order to combat the dollar stores which have drawn away customers from the retail giant.

Newmont Mining Co. (NEM) (GRMN) (GSS) (HMY) (IDSY) (MFN) (NDN) Close Up

Newmont Mining Co. (NYSE:NEM) closed Monday at 62.86, up $2.78, or 4.63 percent.

Garmin Ltd. (NASDAQ:GRMN) ended the session at $31.62, gaining $0.62, or 2.00 percent.

Golden Star Resources Ltd. (AMEX:GSS) closed Monday at $2.40, jumping $0.20, or 9.09 percent.

Harmony Gold Mining (NYSE:HMY) closed at $12.91, climbing $0.95, or 7.94 percent.

I.D. Systems Inc. (NASDAQ:IDSY) closed at $4.85, rising $0.31, or 6.83 percent.

Minefinders Corp. Ltd. (AMEX:MFN) ended the day at $16.95, increasing $1.26, or 8.03 percent.

99 Cents Only (NYSE:NDN) closed at $18.00, soaring $1.42, or 8.56 percent.

Big Lots (NYSE: BIG), 99 Cents Only Stores (NYSE:NDN) Most Likely LBO Candidates Says Barclays

With the attention of private equity seeming to be focused on the small retail sector lately, Barclays took a look at companies left that could fit the profile of a probable candidate, and feel Big Lots (NYSE:BIG) and 99 Cents Only Stores (NYSE:NDN) are among the few that warrant a real chance of being taken over and going private.

Barclays said, "Private equity interest in retail companies appears to have increased recently, with the just completed LBO of Gymboree (Nasdaq:GYMB) and pending LBOs of J. Crew (NYSE:JCG) and of Jo-Ann Stores (NYSE:JAS). These transactions have focused investors' attention on other retailers that could potentially be taken private. We, too, have reviewed our universe of retailers - specifically the small-box discounters - to determine whether any of them would be suitable LBO candidates. We believe some of the key criteria for a successful LBO include valuation, the outlook for free cash flow generation, ownership structure, and size. Based on our analysis, Big Lots (BIG) is the only one of the five small-box discounters we cover that fits these criteria. It has strong free cash flow, expansion potential, broad ownership, and a low valuation. Also, its enterprise value of $2.4 billion means the required debt and equity financing are likely to be readily available."

"All the stocks we reviewed have strong and growing free cash flow, but Dollar Tree (Nasdaq:DLTR) and Family Dollar (NYSE:FDO) both have valuations that are high enough to limit private equity returns. Dollar General (NYSE:DG) is not only valued at a similar level to DLTR and FDO, but its shares are still majority owned by private equity investors following its 2007 LBO. 99 Cents Only Stores (NDN) is more reasonably valued and an ideal size."

Big Lots closed Thursday at $32.09, gaining $0.41, or 1.29 percent. 99 Cents Only closed at $15.20, losing $0.26, or 1.68 percent.

99 Cents Only (NYSE:NDN), Aeropostale (NYSE:ARO), American Eagle (NYSE:AEO) Named Top LBO Candidates for 2011 by Deutsche (NYSE:DB)

Deutsche Bank (NYSE:DB) released an interesting list of takeover candidates for 2011 in the U.S retail sector, using a metric of those which would probably generate 20 percent premium or more, with their top possibilities being 99 Cents Only (NYSE:NDN), Aeropostale (NYSE:ARO) and American Eagle (NYSE:AEO).

Other big names they consider leading candidates, although not as probable as the three above, were Macy's (NYSE: M), Saks (NYSE:SKS), RadioShack (NYSE:RSH), The Buckle (NYSE:BKE), Best Buy (NYSE:BBY), AnnTaylor (NYSE:ANN), Big Lots (NYSE:BIG) and Gap (NYSE:GPS)

99 Cents Only closed at $15.65 Monday, gaining $0.08, or 0.51 percent. Aeropostale closed at $25.21, up $0.38, or 1.53 percent. American Eagle ended the session at $14.37, down $0.09, or 0.62 percent.