Family Dollar rejects Dollar General offer
Family Dollar Stores Inc. chairman and CEO Howard Levine said in a statement Thursday that its board and advisers reviewed Dollar General Corp.'s offer and determined that it was not reasonably likely to be completed on the terms proposed.
Dollar General chairman and CEO Rick Dreiling said in a statement that the company was disappointed in Family Dollar's decision, and that it had done an extensive antitrust analysis that confirmed that its proposal could be completed. Dollar General said it was willing to share its analysis with Family Dollar and that it was still confident it could resolve any regulatory concerns about competition.
Dollar General said it was reviewing its options and still believes its offer is better than the Dollar Tree deal.
Family Dollar became a takeover target in part because of its business struggles. The Matthews, N.C., company has been shuttering stores and cutting prices in hope of boosting its financial performance. In June, investor Carl Icahn urged the company to put itself up for sale.
On Monday, Dollar General - the nation's biggest dollar-store chain - offered about $8.95 billion, or $78.50 per share in cash, for Family Dollar. The Goodlettsville, Tenn., company said at the time that it believed it could quickly address any antitrust issues and was willing to divest up to 700 of its stores in order to get the necessary approvals.
In a letter sent to Family Dollar on Wednesday, Dollar General said that it believed the number of stores it was offering to divest was "more than sufficient to take this [antitrust] issue off the table."
Last month Family Dollar agreed to an $8.5 billion deal with Chesapeake, Va.-based Dollar Tree.