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Family Dollar reaches out to investors as buyout vote looms


Matthews, N.C. -- Family Dollar is urging its shareholders to support a buyout offer from rival discounter Dollar Tree with less than two weeks remaining before a vote on the pending deal. Family Dollar shareholders are scheduled to vote Jan. 22. on whether to accept the Dollar Tree offer.

Family Dollar has rejected numerous approaches from Dollar General, the latest worth $9.1 billion in cash, in favor of an $8.5 billion cash-and-stock offer from Dollar Tree. It has cited risks that the Dollar General deal would be blocked because of anti-monopoly rules.

In a letter to investors Monday, CEO Howard Levine said that Family Dollar may be required by federal regulators to divest itself of 310 stores if it's acquired by Dollar Tree. Levine said that the FTC has indicated that it might need to divest itself of between 3,500 and 4,000 stores for a deal with Dollar General to go through, though that is not a final figure. Based on those numbers, Levine doesn't believe the FTC's divestiture demands would be reduced to anywhere 1,500 or so stores that Dollar General Corp. previously said that it is willing to get rid of.

Family Dollar could reach an agreement with the Federal Trade Commission by the end of the month, Levine said, and the company has said previously that it would be willing to divest as many as 500 stores to get the deal done.

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