Discount retailer 99 Cents Only Stores Inc. says it has a deal to be acquired by two investors for about $1.6 billion.

The company says that affiliates of the investment firm Ares Management LLC and the Canada Pension Plan Investment Board have offered $22 per share in cash.

That is a 7 percent premium to Monday's closing price and 32 percent more than the retailer's price before disclosing in March that it had received a buyout proposal.

The deal must be approved by 99 Cents Only shareholders. The retailer's board is recommending approval.

Members of the company's founding Schiffer-Gold family say they support the deal and will continue to hold a minority stake.

99 Cents only shares rose 91 cents, or 4.4 percent, to $21.40 in premarket trading Tuesday.