Jo-Ann Stores (JAS) said it has agreed to be acquired by an affiliate of private-equity firm Leonard Green & Partners for about $1.6 billion, or $61 per share in cash. The offer represents a 34% premium to the shares' closing price on Wednesday of $45.63. JAS shares jumped $15.24, or 33.4%, to $60.87 in premarket trading.

The fabrics and crafts retailer's board has approved the deal and recommended that shareholders adopt the agreement.

The acquisition, if approved by shareholders, is expected to close in the first half of calendar 2011. The deal is subject to customary closing conditions and regulatory approvals, but is not subject to any financing conditions. Under the agreement, the board will also be permitted to solicit alternative proposals through Feb. 14, 2011.

Scott Cowen, lead director and chairman of the special committee that recommended approval of the deal, said he believes it "is the best way to maximize value for shareholders. "While the company was not actively seeking this transaction, once the offer was received and negotiated, the Special Committee determined that it was in the best interest of the company's shareholders, as well as its employees and other partners."

Todd Purdy of Leonard Green & Partners said, "Jo-Ann Stores is a clear leader in the fabric and craft retail industry. We are excited to partner with Jo-Ann Stores' talented management team and look forward to the next phase of the company's growth."


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