Research Company to Publish ShopKo Report
Posted on: Sunday, 25 September 2005, 18:00 CDT
Sep. 24--Institutional Shareholder Services Inc., an investor research firm, will release a new analysis early next week of the proposal to sell ShopKo Stores Inc. to a Minneapolis private equity firm.
ShopKo, a discount chain based in Green Bay, has set a date of Oct. 10 for a shareholder vote on a revised sale agreement with Goldner Hawn Johnson & Morrison.
The price has been increased by $1 per share to $25, and the breakup fee to be paid to Goldner Hawn if the deal fails has been cut in half to $13.5 million.
In a proxy statement filed this week with the Securities and Exchange Commission, ShopKo released a new five-year income projection for the company predicting slow growth. The projection calls for sales of $3 billion in 2006, rising to $3.3 billion in 2007 through 2010.
The projection is based on the closing of 10 ShopKo and 55 Pamida stores between 2005 and 2009, with headcount reductions and charges related to the closings and to the remodeling of 126 ShopKo and 126 Pamida stores.
No new stores would be opened from 2005 through 2009.
Earnings per share are forecast at $1.57 in 2006, declining to $1.22, and $1.20 in 2007 and 2008, and then rising to $1.91 and $2.23 in 2009 and 2010.
But a supplemental analysis presented Sept. 9 to ShopKo's special board of directors committee overseeing the sale process calls for lower earnings, based on an assumption of lower earnings before taxes, depreciation and amortization and increased capital spending.
The supplemental analysis, prepared by Merrill Lynch, calls for earnings per share of $1.25 in 2006, declining to 64 cents and 63 cents in 2007 and 2008 and then rising to $1.27 and $1.58 in 2009 and 2010.
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SKO,
Source: The Milwaukee Journal Sentinel
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