Minneapolis-based Goldner Hawn Johnson & Morrison (GHJM), a private equity investment firm, says it has agreed to acquire Green Bay, Wis.-based ShopKo, a publicly traded company on the New York Stock Exchange, for slightly more than $1 billion.

The only large discount retailer still standing under the weight of Wal-Mart and Target competition, ShopKo operates 160 stores in secondary retail markets in 15 Western and Midwestern states, and its subsidiary Pramida has 221 stores in small-town markets with populations of between 2,000 and 8,000.

“As a private company, we will be able to intensify our focus and efforts on exceeding the expectations of customers, employees and suppliers,” said Jack Eugster — who is stepping down as chairman because of a potential conflict of interest as a major shareholder — in a letter to 25,000 employees. “With the financial backing of a respected Midwest investment firm and national financial institutions, our business will be better positioned.” GHJM, one of a growing number of private investment firms acquiring retail real estate, will assume $330 million in ShopKo debt, and outstanding ShopKo common stock will be converted to the right to receive $24 cash per share. About 29.8 million shares of common stock are outstanding. ShopKo stock closed at $26.02 on April 8, the day the acquisition was announced.

Lisa Kro, GHJM principal and CFO, says there are no plans now to close any stores, but couldn't comment further.