Dollar General Ups Bid For Family Dollar

UPDATE: Dollar General has launched a tender offer to acquire all outstanding shares of Family Dollar for $80.00 per share in cash, or $9.1 billion. The offer is increased from the company’s previous bid of $78.50 a share.

The offer is scheduled to expire at 5:00 p.m. EST on October 8, 2014, unless the offer is extended.

“Our offer provides Family Dollar shareholders with significantly greater value than the existing agreement with Dollar Tree, as well as immediate and certain liquidity for their shares,” said Rick Dreiling, Chairman and CEO of Dollar General. “By taking this step, we are providing all Family Dollar shareholders a voice in this process, and we urge them to tender into our offer.”

Dollar General has filed with the Securities and Exchange Commission, and will begin the antitrust approval process by presenting its position directly to the Federal Trade Commission, according to Drieling.



Family Dollar has rejected the $8.9 billion bid from Dollar General, and is favoring Dollar Tree’s initial deal to merge for $8.5 billion.

In a statement, Family Dollar CEO Howard Levine revealed that Dollar General’s offer was declined because of “antitrust issues.”  

Levine added: “Our board reviewed, with our advisers, all aspects of Dollar General’s proposal and unanimously concluded that it is not reasonably likely to be completed on the terms proposed,” Levine said. “Accordingly, our board rejects Dollar General’s proposal and reaffirms its support for the pending merger with Dollar Tree.”


Dollar General placed a bid on Family Dollar worth $78.50 a share, or $9.7 billion. The deal exceeds Dollar Tree’s initial offer of $74.50 a share, which was placed on July 28 and approved by both boards of directors.

Rick Dreiling, CEO of Dollar General, said: “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.”

Should the deal be approved, Dollar General and Family Dollar will converge to create a small-box discount retailer that spans across 20,000 stores in 46 states. Total sales for the year would exceed $28 billion.

Now that the bidding war for Family Dollar is heating up, it will be unclear which retailer will win final ownership of the brand.

Below is our original coverage of Dollar Tree’s proposed deal to acquire Family Dollar, which was published on July 28.

Dollar Tree has entered into an agreement to acquire fellow discount retailer Family Dollar Stores in a cash and stock transaction worth approximately $8.5 billion at $74.50 per share, which is 23% above Family Dollar’s closing stock price on July 25. The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to close by early 2015.

This deal may have come as a surprise to some, since a deal with Dollar General also was up for discussion recently. A few weeks ago CNBC’s Jim Cramer debated the potential deals and suggested that Dollar General would be the better choice.

But following investments in Family Dollar by two billionaires, Carl Icahn and Nelson Peltz, the retail chain may have become a more palatable acquisition, according to a report on

In acquiring Family Dollar, Dollar Tree will operate more than 13,000 stores throughout North America with sales of more than $18 billion. Upon completion of the transaction, the brands will continue to operate under the Dollar Tree and Family Dollar names.

The transaction is designed to enable Dollar Tree to offer both fixed-price and multi-price point store formats with an expanded product assortment.

“This acquisition will extend our reach to lower-income customers and strengthen and diversify our store footprint,” said Bob Sasser, CEO of Dollar Tree in a press statement. “We plan to leverage best practices across both organizations to deliver significant synergies, while we accelerate and augment Family Dollar’s recently introduced strategic initiatives. Combined, our growth potential is enhanced with improved opportunities to increase the productivity of the stores and to open more stores across multiple banners.”

The agreement provides Family Dollar with a 22.8% premium over the company’ closing price as of July 25, 2014. Icahn acquired a 9.4% stake in Family Dollar in July, and urged the company in a letter to put itself up for sale immediately.

In April, Family Dollar announced it would close 370 stores and slash prices on nearly 1,000 basic store items amid disappointing Q2 2014 financial results.

Howard Levine, CEO of Family Dollar, will remain with the company and report directly to Sasser. Additionally, Levine will become a member of the Dollar Tree Board of Directors.

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