Table of Contents
GOODLETTSVILLE, Tenn. — Dollar General Corp. on Monday bid $8.95 billion for Family Dollar Stores Inc., topping Dollar Tree Inc.’s $8.5 billion offer.
Dollar General Corp. on Monday bid $8.95 billion for Family Dollar Stores Inc., topping Dollar Tree Inc.’s $8.5 billion offer.
Dollar General’s bid of $78.50 per share in cash represents a premium of 3.2% to Family Dollar’s Friday close. Family Dollar had 113.9 million shares outstanding as of July 5, according to its latest filing.
Dollar Tree last month offered $74.50 per share.
"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 chief executive officer. "For Dollar General shareholders, the proposed combination of Dollar General and Family Dollar would be a significant strategic opportunity to create immediate and lasting shareholder value.
"For both Dollar General and Family Dollar customers, we would be able to provide better value and greater selection.
"We have the utmost respect for Family Dollar, its leadership and its employees," Dreiling added. "We look forward to expeditiously entering into constructive discussions with Family Dollar in order to sign a definitive merger agreement that provides enhanced value to Family Dollar shareholders and enables Dollar General to realize the benefits of this combination."
Activist investor Carl Icahn had pushed Family Dollar, the No. 2 U.S. dollar store chain, to sell itself to No. 1 Dollar General. Icahn has been reducing his investment in Family Dollar since Dollar Tree made the bid.
The combination of the two retailers would create a chain with nearly 20,000 stores and annual sales of over $28 billion. Dollar General said it expected annual synergies of $550 million to $600 million three years after the deal closes.
Dreiling said he would stay on as CEO of the combined company through May 2016. Dollar General said in June he would retire next year.
Family Dollar’s biggest presence is in the eastern United States and Texas. Dollar General has over 1,000 stores in Texas. To mitigate antitrust concerns, it said it would be willing to divest up to 700 stores.
