General Merchandise/HBC

Dollar General Not Surrendering Family Dollar to Dollar Tree

Despite latest rejection, rival maintains committed to "superior" offer

GOODLETTSVILLE, Tenn. -- The ping pong match between Dollar General and Family Dollar continues. In response to the decision by the Family Dollar Stores Inc. board to reject Dollar General Corp.'s tender offer to acquire all outstanding shares of Family Dollar for $80 per share in cash, Dollar General said it remains committed to acquiring the rival chain.

Dollar General Family Dollar (CSP Daily News / Convenience Stores)

In rejecting Dollar General's offer, Family Dollar reaffirmed its support for a deal with Dollar Tree Inc.

Dollar General said it remains committed to acquiring Family Dollar "in a transaction that would deliver superior value to Family Dollar shareholders and is capable of being completed on the terms proposed."

The company also stated that it remains confident in both its antitrust strategy and the analysis performed by its antitrust advisors.

"Dollar General has made every good faith effort to engage in constructive discussions with the Family Dollar board of directors," said Rick Dreiling, chairman and CEO of Dollar General. "At each turn, despite Dollar General's superior proposals and to the detriment of the Family Dollar shareholders, the Family Dollar board has refused to engage, leaving Dollar General with no choice but to launch a tender offer."

He continued, "Dollar General has invested significant time and resources in pursuit of this acquisition and remains committed to its successful completion. Family Dollar continues to make statements that are not worthy of debate. Rather than engaging with us in a meaningful and constructive manner, the Family Dollar Board has continued its efforts to distract shareholders from the main issue at hand--that a superior proposal adequately addressing antitrust issues remains on the table. Through our tender offer, Dollar General has provided all Family Dollar shareholders a voice in this process, and we urge them to tender into our offer."

Dollar General's all-cash offer of $80 per share provides Family Dollar shareholders with a "substantially superior" valuation to the $74.50 per share cash-and-stock offer that Dollar Tree announced on July 28, 2014.

Dollar General's offer provides Family Dollar's shareholders with approximately $640 million of additional aggregate value over Dollar Tree's offer and represents a premium of 31.9% over the closing price of $60.66 for Family Dollar stock on the day prior to the Dollar Tree announcement, Dollar General said.

As part of a definitive merger agreement with Family Dollar, Dollar General would be willing to agree to divest up to 1,500 stores if required by the Federal Trade Commission (FTC) and to pay Family Dollar a $500 million reverse breakup fee if the transaction did not close for reasons related to antitrust approvals.

The offer is not conditioned upon any financing arrangements.

Matthews, N.C.-based Family Dollar currently operates more than 8,100 stores in 46 states. Goodlettsville, Tenn.-based Dollar General has more than 11,000 stores in 40 states. Chesapeake, Va.-based Dollar Tree currently operates more than 5,000 stores in 48 states and five Canadian provinces.

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