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Dollar General hikes acquisition bid for Family Dollar
03 Sep '14
2 min read
Following a rejection of its earlier proposal, NYSE listed Dollar General Corporation has sent an enhanced acquisition proposal for Family Dollar Stores.
Dollar General said it would increase its all-cash proposal for all outstanding shares of Family Dollar to $80.00 per share, up $1.50 per share from its first proposal.
Dollar General also indicated that it will also increase the number of stores to divest to 1,500 if ordered by the Federal Trade Commission, which it said is an indicator of its confidence to obtain antitrust approval.
In case Dollar General is not able to obtain antitrust approval, the retailer has agreed to pay a $500 million reverse break-up fee to Family Dollar relating to antitrust matters.
Dollar General said the revised proposal provides Family Dollar's shareholders with approximately $640 million of additional aggregate value over Dollar Tree's offer.
This, the retailer added, represents a premium of 31.9 percent over the closing price of $60.66 for Family Dollar stock on the day prior to the Dollar Tree announcement.
On July 28, Dollar Tree bid for Family Dollar in a cash and stock transaction at a consideration of $74.50 per share, a 22.8% premium over Family Dollar’s closing price as of July 25, 2014.
However on August 18, rival Dollar General said it will pay $78.50 per share in cash in a transaction valued at $9.7 billion to Family Dollar shareholders, substantially up from $74.50 per share cash / stock offered by Dollar Tree.
The BoD of Family Dollar Stores, however recommended support of merger agreement with Dollar Tree, while rejecting the non-binding proposal made by Dollar General citing antitrust regulatory considerations on August 25.
Dollar General said it would increase its all-cash proposal for all outstanding shares of Family Dollar to $80.00 per share, up $1.50 per share from its first proposal.
Dollar General also indicated that it will also increase the number of stores to divest to 1,500 if ordered by the Federal Trade Commission, which it said is an indicator of its confidence to obtain antitrust approval.
In case Dollar General is not able to obtain antitrust approval, the retailer has agreed to pay a $500 million reverse break-up fee to Family Dollar relating to antitrust matters.
Dollar General said the revised proposal provides Family Dollar's shareholders with approximately $640 million of additional aggregate value over Dollar Tree's offer.
This, the retailer added, represents a premium of 31.9 percent over the closing price of $60.66 for Family Dollar stock on the day prior to the Dollar Tree announcement.
On July 28, Dollar Tree bid for Family Dollar in a cash and stock transaction at a consideration of $74.50 per share, a 22.8% premium over Family Dollar’s closing price as of July 25, 2014.
However on August 18, rival Dollar General said it will pay $78.50 per share in cash in a transaction valued at $9.7 billion to Family Dollar shareholders, substantially up from $74.50 per share cash / stock offered by Dollar Tree.
The BoD of Family Dollar Stores, however recommended support of merger agreement with Dollar Tree, while rejecting the non-binding proposal made by Dollar General citing antitrust regulatory considerations on August 25.
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