SKO Shopko Stores

GREEN BAY, Wis., Dec. 21 /PRNewswire-FirstCall/ -- ShopKo Stores, Inc. (NYSE:SKO) announced today that it intends to waive certain conditions to the consummation of its offer to purchase (the "Offer") any and all of the outstanding $100 million principal amount of 9-1/4% Senior Notes due 2022 (the "Notes") at the closing (the "Closing") of the merger transaction with SKO Acquisition Corp. (the "Merger"). In addition, ShopKo announced that it has extended the expiration date of the Offer. ShopKo has determined, based on the fact that as of the close of business on December 20, 2005, holders of 17,253,393 shares of ShopKo common stock (representing approximately 57.0% of the issued and outstanding common stock) have returned proxy cards authorizing the proxies named therein to vote for approval and adoption of the Merger Agreement with SKO Group Holding Corp. and SKO Acquisition Corp., and ShopKo's review of the other remaining conditions to the effectiveness of the Merger, it is likely that the Closing will occur on Wednesday, December 28, 2005 (the "Closing Date"). Although no assurances that the Closing will occur on such date can be given and proxies that have already been returned in favor of the Merger Agreement can be revoked at any time until the vote on the Merger is taken at the special meeting of shareholders currently scheduled for December 23, 2005, ShopKo has announced today that it intends to irrevocably waive, on the date that the Merger becomes effective, the merger condition contained in the Offer and the condition that no proceeding be pending that questions the validity or legality of the Offer (the "litigation condition") as it relates solely to the previously disclosed litigation brought against ShopKo by certain of the holders of the Notes. ShopKo also announced that, following such waivers and the satisfaction or waiver of the remaining conditions to the Offer, it intends to purchase all Notes that have been validly tendered. The Offer was scheduled to expire on Friday, December 23, 2005 at 9:30 a.m., New York City time. The Offer has been amended to now expire at 5:00 p.m., New York City time, on Wednesday, December 28, 2005, the anticipated Closing Date, unless further extended by ShopKo or earlier terminated. The terms of the Offer and Solicitation are described in the Offer to Purchase and Consent Solicitation Statement dated June 30, 2005, as amended by the Supplements dated August 10, 2005 and November 29, 2005. ShopKo announced on August 15, 2005 that it had received the requisite consents to amend the indenture governing the Notes. ShopKo executed the supplemental indenture on August 16, 2005, eliminating substantially all of the restrictive covenants and certain events of default in the indenture governing the Notes. Copies of the Offer to Purchase and Consent Solicitation Statement may be obtained from Global Bondholder Services Corporation, the information agent for the Offer, at (866) 736-2200 (US toll free) or (212) 430-3774 (collect). ShopKo said it has been informed by the information agent that, as of 5:00 p.m., New York City time, on December 20, 2005, approximately $94.2 million in aggregate principal amount of Notes had been tendered in the Offer. This amount represents approximately 94.2% of the outstanding principal amount of the Notes. Banc of America Securities LLC is acting as the sole dealer manager for the Offer. Questions regarding the Offer may be directed to Banc of America Securities LLC at (212) 847-5834 or (888) 292-0070. THIS ANNOUNCEMENT IS NOT AN OFFER TO PURCHASE, A SOLICITATION OF AN OFFER TO PURCHASE OR SELL OR A SOLICITATION OF CONSENTS WITH RESPECT TO ANY SECURITIES. THE OFFER AND CONSENT SOLICITATION ARE BEING MADE SOLELY BY THE OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT DATED JUNE 30, 2005, AS AMENDED. ShopKo Stores, Inc. is a retailer of quality goods and services headquartered in Green Bay, Wis., with stores located throughout the Midwest, Mountain and Pacific Northwest regions. Retail formats include 140 ShopKo stores, providing quality name-brand merchandise, great values, pharmacy and optical services in mid-sized to larger cities; 223 Pamida stores, 116 of which contain pharmacies, bringing value and convenience close to home in small, rural communities; and three ShopKo Express Rx stores, a new and convenient neighborhood drugstore concept. With more than $3.0 billion in annual sales, ShopKo Stores, Inc. is listed on the New York Stock Exchange under the symbol SKO. For more information about ShopKo, Pamida or ShopKo Express Rx, visit our Web site at http://www.shopko.com/. Statements in this press release about the expected timing and completion of the proposed Merger and all other statements other than historical facts constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements. All forward-looking statements speak only as of the date hereof and are based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. For example, ShopKo may not be able to complete the proposed Merger under the terms in the existing Merger Agreement or other acceptable terms or at all because of a number of factors, including the failure to obtain shareholder approval or the failure to satisfy the other closing conditions. These factors, and other factors that may affect the business or financial results of ShopKo are described in ShopKo's filings with the SEC, including ShopKo's annual report on Form 10-K for the fiscal year ended January 29, 2005, as amended. DATASOURCE: ShopKo Stores, Inc. CONTACT: Banc of America Securities LLC, Toll free, +1-888-292-0700, or Collect, +1-212-847-5834 Web site: http://www.shopko.com/

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