PR Newswire - ShopKo Merger -- September 29 2005 - Copy Edited

ShopKo Extends Tender Offer for $100MM 9-1/4% Senior Notes Due 2022

ShopKo Stores, Inc. (NYSE: SKO) announced today that it has extended its offer to purchase (the "Offer") any and all of its outstanding $100 million principal amount of 9-1/4% Senior Notes due 2022 (the "Notes") in connection with the previously announced definitive merger agreement, as amended, that provides for the acquisition of ShopKo by Badger Retail Holding, Inc. and Badger Acquisition Corp., which are affiliates of Minneapolis-based private equity firm Goldner Hawn Johnson & Morrison Incorporated (the "Merger").

The Offer, scheduled to expire on Thursday, September 29, 2005 at 5:00 p.m., New York City time, will now expire at 9:30 a.m., New York City time, on Tuesday, October 18, 2005, the day after the special shareholders' meeting at which ShopKo shareholders will vote on the proposal relating to the amended merger agreement, unless further extended or earlier terminated by ShopKo.

All other terms, provisions and conditions of the Offer will remain in full force and effect. 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 a Supplement dated August 10, 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 September 29, 2005, approximately $94.0 million in aggregate principal amount of Notes had been tendered in the Offer. This amount represents approximately 94.0% of the outstanding principal amount of the Notes.
Banc of America Securities LLC and Morgan Stanley & Co. Incorporated are acting as the dealer managers for the Offer. Questions regarding the Offer may be directed to Banc of America Securities LLC, the lead dealer manager, 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.

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding expected sales and other financial results. Such statements are subject to important factors that could cause ShopKo's actual results to differ materially from those anticipated by the forward-looking statements including those referenced in ShopKo's current annual report on Form 10-K or as may be described from time to time in ShopKo's subsequent SEC filings, and such factors are incorporated by reference.