Family Dollar rejects Dollar General bid. Again.
Family聽Dollar聽is rejecting聽Dollar聽General's latest acquisition offer, and聽Dollar聽Tree says it will now divest as many stores as needed to get antitrust clearance for its deal to buy聽Family聽Dollar.
Family聽Dollar聽rejected an earlier offer of nearly $9 billion from聽Dollar聽General, with the Goodlettsville, Tennessee, discounter then boosting its bid to $9.1 billion.聽Dollar聽General 鈥� the nation's biggest dollar-store chain 鈥� had also revised its proposal to increase the number of stores it would be willing to divest and to include a $500 million reverse break-up fee toFamily聽Dollar聽if the deal hit antitrust roadblocks.
But聽Family聽Dollar聽said Friday that it still has antitrust concerns.聽Dollar聽General did not immediately respond to an email seeking comment.
Family聽Dollar聽has been looking for a lifeline after running into some financial stress, shuttering stores and cutting prices. In June one big shareholder, Carl Icahn, urged the Matthews, North Carolina-based company to put itself up for sale.
A month later聽Family聽Dollar聽Stores Inc. accepted an $8.5 billion deal with Chesapeake, Virginia-based聽Dollar聽Tree Inc. The transaction includes $59.60 in cash and the equivalent of $14.90 in shares of聽Dollar聽Tree for each share held. The companies valued the transaction at $74.50 per share at the time. Including debt and other costs,聽Family聽Dollar聽and聽Dollar聽Tree estimated the deal to be worth approximately $9.2 billion.
The two companies said Friday that they anticipate the transaction closing as early as the end of November.
Dollar聽Tree's willingness to shed more stores comes three days after聽Dollar聽General Corp. said it would divest up to 1,500 stores to get a deal done.聽Dollar聽General originally agreed to shed 700 stores.
Dollar聽Tree CEO Bob Sasser said in a statement that he believes the company would be required to divest few, if any, of its stores because its business model is significantly different from聽Family聽Dollar's.
"Our product assortment and pricing is not driven by local competition, and we have very limited store overlap," he said.
The businesses of聽Family聽Dollar聽and聽Dollar聽General are more similar than聽Dollar聽Tree's. The first two sell items at a variety of prices while at聽Dollar聽Tree, all items are a buck.
Aside from agreeing to potentially divest more stores, all other terms of聽Dollar聽Tree's deal with聽Family聽Dollar聽are unchanged.
Family聽Dollar聽and聽Dollar聽Tree said that they expect the Federal Trade Commission to put forth a second request for additional information on their proposed transaction on Monday. The companies said that they are confident they will receive regulatory approval for the transaction.
Family聽Dollar's聽stock fell $1.05 to $79.01 in morning trading, while shares of聽Dollar聽Tree rose 16 cents to $55.18.聽DollarGeneral's stock declined $1.39, or 2 percent, to $63.09.
