* Deal with affiliate of Sbar’s Inc
* To be bought for $1.60/shr (Adds background, stock price history)
By Mihir Dalal
Oct 4 (Reuters) - An affiliate of Sbar’s Inc will buy smaller rival A.C. Moore for about $40.8 million in cash, marking the second deal in the arts and crafts retail space this year.
Earlier this year, private equity firm Leonard Green & Partners’ bought Jo-Ann Stores for $1.6 billion.
The offer of $1.60 for each A.C. Moore Arts And Crafts Inc share is 68 percent more than the stock’s Monday close.
However, the per share price is less than half the stock’s 52-week high of $3.56 in March.
Weaker-than-expected quarterly results, dodgy consumer confidence and a volatile stock market have hit A.C. Moore’s stock.
The company, which sells arts, crafts and floral merchandise through 134 stores in the eastern United States, had been looking at options, including a possible sale since January.
A.C. Moore has posted losses since 2008, unable to overturn a steady fall in revenues since 2007, partly due to stiff competition from bigger rivals Jo-Ann Stores Inc and privately held Michaels Stores.
It turned into a penny stock after trading in the low 20s in 2007.
The Sbar’s affiliate has received a financing commitment from Wells Fargo to provide debt financing for the deal. (Reporting by Mihir Dalal in Bangalore; Editing by Supriya Kurane)