Dollar General Increases Its Offer for Family Dollar

Dollar-store bidding war heats up with $80-per-share proposal

Steve Holtz, Editor in Chief, CSP Daily News

Dollar General basket

MATTHEWS, N.C. -- Family Dollar Stores Inc., a leading national discount retailer, confirmed that it has received a revised, non-binding, unsolicited proposal from Dollar General to acquire all of the outstanding common shares of Family Dollar.

The offer comes more than a month after Family Dollar entered into a definitive merger agreement with Dollar Tree Inc., the nation's leading operator of discount variety stores, under which Dollar Tree would acquire Family Dollar in a cash and stock transaction. Under the terms of the agreement, Family Dollar shareholders would receive $59.60 in cash and $14.90 equivalent in Dollar Tree shares for each common share of Family Dollar owned, subject to a collar. At closing, Family Dollar shareholders would own no less than 12.7% and no more than 15.1% of the outstanding common stock of Dollar Tree.

Dollar General on Tuesday raised its offer for Family Dollar Stores Inc. to $80 a share in cash. The sweetened proposal comes after Family Dollar on Aug. 21 rejected Dollar General's offer of $78.50 per share based on "antitrust issues."

“Consistent with its fiduciary duties and subject to the terms of its existing merger agreement with Dollar Tree Inc., Family Dollar’s Board of Directors, in consultation with its legal and financial advisors, will review and consider the revised proposal,” Dollar Tree reported.

The company's Board of Directors has not changed its recommendation in support of the merger with Dollar Tree, it added. Family Dollar had no further comment on Dollar General’s proposal until the board has completed its review.

Morgan Stanley & Co. LLC is serving as exclusive financial advisor to Family Dollar, and Cleary Gottlieb Steen & Hamilton LLP is serving as legal counsel.

For more than 54 years, Family Dollar has been providing value and convenience to customers in easy-to-shop neighborhood locations. Matthews, N.C.-based Family Dollar’s mix of name brands and quality, private brand merchandise appeals to shoppers in more than 8,100 stores in rural and urban settings across 46 states.

Steve Holtz, CSP/Winsight By Steve Holtz, Editor in Chief, CSP Daily News
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