A pair of investment companies have bought US discount retailer 99 Cents Only Stores for US$1.6bn.

Ares Management LLC and Canada Pension Plan Investment Board (CPPIB) have struck a deal to buy the company worth $22 per share.

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The per share price represents a premium of 32% to 99 Cents Only Stores’ closing share price on 10 March, the day prior to public disclosure by the company that it had received an acquisition proposal, 99 Cents Only said.

CEO Eric Schiffer said the deal provided “significant value to our shareholders”.

He added: “We have come to know and respect Ares Management and CPPIB through this process and we believe they will be excellent partners and help us achieve our long term goals as a company.”

Schiffer, president Jeff Gold and executive vice president Howard Gold will continue in their roles at the company and will serve as directors. David Gold, who founded the company in 1982, will serve as chairman emeritus.

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In March, investment firm Leonard Green & Partners made an unsuccessful $1.3bn bid for the company. 99 Cents Only operates 289 stores in California, Texas, Arizona, and Nevada.

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