ARLINGTON, Va. — FBR here, a mutual fund that owns approximately 5.5% of the stock of Los Angeles-based 99 Cents Only Stores, urged the company on Monday to conduct an auction process rather than accept a buyout bid at a price it believes is less than the company is worth.
At issue is a bid of $19.09 per share proposed by the Schiffer/Gold family, which owns the majority shares in 99 Cents Only, in conjunction with Leonard Green & Partners, Los Angeles. FBR said it believes the company is worth at least $21.75 to $23.50 per share.
In a letter to the special committee of the board of 99 Cents Only, FBR cited "the perceptions of potential bidders that they must secure the Schiffer/Gold family's support to compete effectively in a bid to buy the company. This perception can only serve to chill the auction process ... at the expense of non-insider shareholders. Clearly the committee should seek from the family a public and binding commitment to support the highest and best bid — regardless of the bidder — that can be secured through this process."
FBR also requested a face-to-face meeting with committee members. "Even the act of having such a meeting will be seen by the market and potential bidders as a positive step, further demonstrating your commitment to an auction process that is not biased in favor of the Schiffer/Gold family's interests," the letter said.