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Dollar General launches hostile bid for Family Dollar
11
Sep '14
After being spurned twice by the Board of Directors of Family Dollar, Dollar General Corp launched a hostile bid to acquire all outstanding shares of Family Dollar Stores for $80.00 per share in cash.

Last week, the Family Dollar Board of Directors had once again rejected the new Dollar General proposal, by once again citing that the proposal will not be able to overcome anti-trust regulations.

The Family Dollar Board expressed confidence and was in favour of continuing to discuss the deal with Dollar Tree.

The biggest US retailer by number of stores, Dollar General said the offer is scheduled to expire at 5:00 p.m., New York City time, 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, CEO at Dollar General.

He added, "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. Additionally, we now can begin the antitrust review process and will have an opportunity to present our position directly to the FTC.”

Dollar General's all-cash offer of $80.00 per share is at a higher valuation to the $74.50 per share cash or stock offer announced by Dollar Tree on July 28, 2014.

Dollar General said its offer provides Family Dollar's shareholders with approximately $640 million of additional aggregate value over Dollar Tree's offer and 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.

As part of a definitive merger agreement with Family Dollar, Dollar General agreed to divest up to 1,500 stores if required by the FTC and to pay Family Dollar a $500 million reverse break-up fee if the transaction did not close for reasons related to antitrust approvals. (AR)

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