DREP: 99 Cents Only: Apollo may have dropped out, source says



26-Sep-11
18:28 	99 Cents Only: Apollo may have dropped out, source says
Story

99 Cents Only Stores (NYSE:NDN) may have lost Apollo Management as a bidder due to the expense of financing the private equity firm’s bid, said a source familiar with the matter. Final bids are due this week, as previously reported by this news service.

The founders of the company, the Schiffer/Gold family, along with private equity firm Leonard Green & Partners, offered to buy 99 Cents for USD 19.09 per share on 11 March. The Schiffer/Gold family owns approximately 33% of the Commerce, California-based "extreme value" retailer.

Apollo declined to comment. Leonard Green & Partners and 99 Cents Only Stores did not return requests seeking comment. An industry banker said he heard Leonard Green was still trying to get financing commitments. The source said it was likely Leonard Green would table an offer.

Apollo’s offer would have included a business combination with its portfolio company Smart & Final. The expense of securing financing for a 99 Cents bid in conjunction with refinancing Smart & Final's debt proved too much, the source said.

Though the 99 Cents Only financing will have covenants, the first source and a second source close to the situation said the deal will use the BJ’s Wholesale Club’s (NYSE:BJ) deal financing as a benchmark. BJ's offered pricing guidance of Libor+ 575bps with a 96 OID for its USD 1.075bn seven-year first lien facility, this news service's sister publication Debtwire reported on 21 September.

Apollo has played stalking horse in several recent auctions, including BJ's and Gymboree.

by Mike Stone and Soma Biswas

Source 	dealReporter

Target 	99 Cents Only Stores (NDN) 	DS   Int.
Financial advisor 	Lazard (LAZ)
Lawyer 	Morrison & Foerster LLP
Bidder 	Leonard Green & Partners LP 	DS   Int.
Bidder 	Apollo Management International LLP 	DS   Int.
Bidder 	David Gold (Chairman of 99 Cents Only Stores) 	DS   Int.
Other 	Smart & Final Inc 	Int.

Intel. Grade 	Strong evidence
Countries 	USA
Sectors 	Consumer: Retail
Intel. ID 	1237253