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Family Dollar BoD rejects revised Dollar General bid
08
Sep '14
Once again citing antitrust regulatory considerations, the Board of Directors of Family Dollar Stores unanimously rejected the revised and non-binding proposal made by Dollar General Corporation on September 2, 2014.

“As per Family Dollar’s merger deal with Dollar Tree, Family Dollar can enter into discussions with any competing bidder, only if the proposal from the competing bidder is not only financially superior, but also likely to be completed on the proposed terms”, Family Dollar said.

Howard Levine, CEO at Family Dollar said, “We reviewed all aspects of Dollar General’s revised proposal and unanimously concluded that it is not reasonably likely to be completed on the terms proposed.

“There is a very real and material risk that the transaction proposed by Dollar General would fail to close, after a lengthy and disruptive review process. Accordingly, we have rejected Dollar General’s revised proposal and reaffirmed its support of the transaction with Dollar Tree.

“The Dollar Tree proposal delivers attractive value in the form of immediate upfront cash and upside participation in a combined Dollar Tree-Family Dollar entity, as well as closing certainty.”

Ed Garden, a Family Dollar director and co-founder at Trian Fund Management said, “We are focused on delivering to Family Dollar shareholders the highest value with certainty, and the Dollar Tree transaction does just that.

“Dollar Tree has taken the antitrust risk off the table by committing to divest as many stores as necessary to obtain antitrust clearance. We remain fully committed to the Dollar Tree transaction.”

Ed Garden continued, “Dollar General’s revised proposal, on the other hand, does not eliminate regulatory risk for Family Dollar shareholders. Dollar General has repeatedly stated that antitrust is not a risk, yet they have put forth proposals that require Family Dollar shareholders to bear the ultimate risk.

“Receiving a reverse breakup fee with an after-tax value of less than $3 a share does virtually nothing to compensate the Family Dollar shareholders for assuming that risk”, he added. (AR)

Fibre2fashion News Desk - India

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