SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): November 20, 1997
SHOPKO STORES, INC.
(Exact name of registrant as specified in its charter)
Minnesota 1-10876 41-0985054
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
700 Pilgrim Way
Green Bay, Wisconsin 54304
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(920) 497-2211
<PAGE>
Item 5. Other Events.
On November 20, 1997, Shopko Stores, Inc.
("Shopko") and Penn-Daniels Inc. (Penn-Daniels")
jointly announced an agreement whereby Shopko will
acquire Penn-Daniels in a transaction valued at
approximately $61 million, including approximately $43
million in Penn-Daniels debt, of which approximately
$22 million will be retired at closing. The
transaction is expected to close by the end of December
pending completion of due dilligence, regulatory
approvals and certain other conditions. Once
completed, the acquisition will be treated as a
purchase business transaction. The joint press release
from ShopKo and Penn Daniels dated November 20, 1997 is
attached hereto as an exhibit and is incorporated
herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit Number Description
99.1 Press Release dated November
20, 1997
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused
this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: November 24, 1997 SHOPKO STORES, INC.
By: /s/ Richard D. Schepp
-----------------------
Richard D. Schepp,
Vice President Legal Affairs
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release dated November 20, 1997.
Exhibit 99.1
ShopKo Announces Plans to Acquire Jacks Retail Chain;
Addition of 19 Stores Begins Expansion Initiative
GREEN BAY, Wis., Nov. 20
ShopKo Stores, Inc. (NYSE: SKO) and Penn-Daniels
Incorporated jointly announced today an agreement in
which ShopKo will acquire Penn-Daniels in a transaction
valued at approximately $61 million, including
approximately $43 million in Penn-Daniels debt, of
which approximately $22 million will be retired at the
time of closing. Penn-Daniels is a family-owned retail
chain operating 19 stores in the Midwest. Closing is
expected to occur by December 31, 1997 contingent upon
the completion of due diligence, regulatory approval
and certain other conditions. Once completed, the
acquisition will be accounted for as a purchase
business transaction.
Penn-Daniels, headquartered in Quincy, Ill.,
generated approximately $200 million in sales for the
year ended January 31, 1997. The company currently
operates 18 Jacks discount stores in Iowa, Illinois and
Missouri and one Lots-A-Deals close-out store in
Moline, Ill., all serviced by a 427,000 square foot
distribution center in Quincy. The company employs
approximately 2,100 associates. William Daniels,
Chairman and Chief Executive Officer, is the son of
Penn-Daniels founder, Joe Daniels.
ShopKo plans to convert Jacks retail locations to
ShopKo stores with remerchandising and remodeling to
begin in January, 1998. The remodeled stores will
feature ShopKo's lifestyle-driven merchandising
strategy focused on casual apparel, home, family
basics, leisure/seasonal and health categories;
including the likely addition of in-store pharmacies
and optical centers. The stores will remain open
during remodeling which is targeted for completion in
July, 1998.
ShopKo intends to gradually phase-out operations
at the Penn-Daniels corporate headquarters, maintaining
all administrative and buying functions at its
headquarters in Green Bay, Wis. Distribution
alternatives for the stores will be evaluated by ShopKo
and plans for the Penn-Daniels distribution center will
be announced at a later date. No significant changes
to the Penn-Daniels work force are planned through mid-
February.
Excluding estimated non-recurring pre-tax costs of
$12 to $15 million, the transaction is expected to be
slightly accretive next fiscal year. Longer term, the
outlook is to generate savings from the elimination of
pre-opening, general administrative and certain
distribution costs which are included in the non-
recurring estimates.
"The acquisition of Jacks is an important step
toward our goal of adding 30 to 35 stores by the end of
the year 2000," said Dale P. Kramer, Chairman,
President and Chief Executive Officer of ShopKo Stores,
Inc. "We have significant experience in Midwestern
markets, and are confident of our ability to respond to
the needs and lifestyle trends of the customers in
these new markets.
"Like ShopKo, Jacks is one of the few regional
chains that has succeeded in a highly competitive
environment," Kramer said. "Jacks customers share
similar characteristics with ShopKo customers and we
believe they will be pleased with the value, quality,
convenience and assortments we offer. They will also
benefit from the addition of in-store pharmacies and
optical centers."
William Daniels, Chairman and Chief Executive
Officer of Penn-Daniels, said, "I have known Dale
Kramer for many years and have watched the progress of
ShopKo. We share similar values and principles for
discount retailing which reinforces our decision to
sell our family business to ShopKo. The information
systems and buying power of a much larger retail
organization should benefit our customers and store
employees."
ShopKo Stores, Inc., headquartered in Green Bay,
Wis., is a leading specialty discount retailer
operating 130 stores in 16 states primarily in the
Upper Midwest, Western Mountain and Pacific Northwest
regions.
The Company also serves the rapidly growing
managed health care industry through its wholly-owned
subsidiary, ProVantage, Inc. Serving a client base
representing more than 20 million lives worldwide,
ProVantage offers information technology support
services, custom prescription benefit management (PBM)
and vision benefit management (VBM) services.
This press release may contain forward-looking
statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform
Act of 1995. Such statements are subject to important
factors which could cause the Company's actual results
to differ materially from those anticipated by the
forward-looking statements. These factors include
those referenced in the Company's current Annual Report
on Form 1O-K or as may be described from time to time
in the Company's subsequent SEC filings. SOURCE
ShopKo Stores, Inc.
CONTACT: Media, Sheree Olson, 920-429-4186 or
Investors, Phyllis J. Proffer, 920-429-4391, both of
ShopKo Stores
