Dollar General tops Dollar Tree’s bid for Family Dollar

Publish Date: August 18, 2014

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It looks like Dollar Tree won't be able to scoop up Family Dollar as easily as it had hoped. Rival chain Dollar General today announced it has made a proposal to acquire Family Dollar Stores for $78.50 per share in cash, in a transaction valued at $9.7 billion. The proposal was conveyed this morning in a letter to Family Dollar’s board of directors. The combination would solidify Dollar General’s position as the largest small-box discount retailer in the U.S. with nearly 20,000 stores in 46 states and sales of over $28 billion, according to the company.

Dollar Tree offered Family Dollar shareholders $74.50 on July 28, 2014.

“For Family Dollar shareholders, our proposal is financially superior to the current transaction agreement with Dollar Tree and would provide Family Dollar shareholders with a substantial premium and immediate liquidity for their shares,” said Rick Dreiling, Dollar General’s chairman and CEO, in a press release.

Dollar General said is prepared to commit to divest up to 700 retail stores in order to achieve the requisite anti-trust approvals. That’s approximately the same percentage of the total combined stores as Dollar Tree has agreed to divest in order for its proposal to be accepted by the FTC.

Dollar General said it is also willing to pay the $305 million break-up fee that would be owed to Dollar Tree if that deal doesn’t happen.

Read our past coverage of the dollar-store sector here.


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