99 Cents Only Stores Shares Surged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Super-cheap retailer 99 Cents Only Stores (NYS: NDN) increased its price for investors 10% in intraday trading today as buyout talks swirl around the company.

So what:The New York Post is reporting that Apollo Global Management LLC is going to make an offer for the company, which has driving shares higher today. 99 Cents Only has already received an offer of $19.09 per share from Leonard Green & Partners LP to take the company private, so presumably Apollo would be willing to pay more than that.

Now what: The company's founding family essentially controls the negotiations and appears ready to change partners to take the company private. We may be seeing the beginning of a bidding war as private equity firms battle to buy the low-end retailer. In any case, it looks like shares have room to move higher, even if Leonard Green's original offer is accepted, so I like the upside potential from here.

Interested in more info on 99 Cents Only Stores? Add it to your watchlist.

At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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