Dollar General makes hostile bid for Family Dollar
Goodlettsville, Tenn. – Dollar General Corp. is upping the ante in its $9.1 billion bid to purchase Family Dollar Inc. by making a hostile takeover offer to Family Dollar stockholders of $80 per share. This offer beats the $74.50 per share, $8.5 billion offer Family Dollar has accepted from Dollar Tree Inc, and is a 32% premium over the closing price of $60.66 for Family Dollar stock on Sept. 9.
Family Dollar said the terms of Dollar General’s hostile tender offer are the same as the buyout proposal made last week, which Family Dollar rejected because of antitrust regulatory concerns. Although Family Dollar said it continues to support its merger with (and lower offer from) Dollar Tree, the retailer said it would "review and consider" the tender offer from Dollar General as part of its fiduciary responsibilities to its shareholders. Family Dollar and Dollar Tree have received a second request for information from the U.S. Federal Trade Commission, which extends the government-mandated waiting period of the acquisition extended until 30 days after the companies have complied with the request.
As part of a definitive merger agreement with Family Dollar, Dollar General would be willing to agree 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. The offer is not conditioned upon any financing arrangements, and Dollar General has received written financing commitments from Goldman, Sachs & Co. and Citigroup Global Markets Inc. for all of the necessary financing.
“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.”