Pathmark Stores (NASDAQ:PTMK)
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Pathmark Stores, Inc. (Nasdaq:PTMK) announced that its
stockholders approved The Yucaipa Companies LLC $150 million
investment in Pathmark at a Special Meeting of Stockholders held here
today. Of the 21.9 million shares voted, over 83% voted in favor of
the proposal. The transaction is expected to close shortly.
Eileen Scott, Chief Executive Officer of Pathmark said, "We are
pleased with the support shown by our stockholders for the agreement
with Yucaipa. With the new investment and Yucaipa's industry
expertise, Pathmark will be in a strong position to pursue
opportunities to create meaningful value for stockholders and better
serve our customers. We are energized and confident as we move forward
to realize the great potential of this partnership."
"The results from today's meeting show that Pathmark stockholders
clearly recognize the compelling strategic and economic benefits of
this transaction," said Yucaipa's founder, Ron Burkle. "Pathmark has
tremendous assets on which to build, and we are eager to work with the
Pathmark team to help the Company capitalize on its strong market
position and competitive advantages."
Under the terms of the agreement announced on March 24, 2005, The
Yucaipa Companies LLC, a Los Angeles based private equity firm, will
purchase from Pathmark 20,000,000 newly-issued shares of the Company's
common stock, Series A warrants to purchase 10,060,000 shares of the
Company's common stock and Series B warrants to purchase 15,046,350
shares of the Company's common stock for an aggregate purchase price
of $150 million in cash. The 20,000,000 shares will represent
approximately 40% of Pathmark's outstanding common stock. The Series A
warrants have an exercise price of $8.50 per share and a three-year
term and the Series B warrants have an exercise price of $15.00 per
share and a ten-year term.
Pathmark is a regional supermarket chain currently operating 142
supermarkets primarily in the New York - New Jersey and Philadelphia
metropolitan areas. Pathmark's stores average 52,400 square feet in
size and include 129 in-store full service pharmacies and a wide array
of financial services offered by 82 in-store banks. Additional
information about Pathmark may be found at its website,
www.pathmark.com.
Founded in 1986, The Yucaipa Companies LLC, has completed mergers
and acquisitions valued in excess of $30 billion. Yucaipa is widely
recognized as a leader in acquisitions, mergers and management of
large retail and distribution entities. As a hands-on investor, the
company works with management to strategically reposition businesses
and implement operational improvement, resulting in value creation for
investors. Specific investments by Yucaipa in the Supermarket sector
have included Food4Less, Dominick's, Ralphs Grocery Co., Smith Food
and Drug, and Fred Meyer.
This press release contains certain "forward-looking statements"
that are subject to risks and uncertainties and could cause actual
results to differ materially. For these statements, the Company claims
the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.
Factors that may affect results include changes in business and
economic conditions generally and in the Company's operating areas,
the competitive environment in which the Company operates and other
risks detailed from time to time in the Company's reports and filings
available from the Securities and Exchange Commission.