Family Dollar rejects Dollar General’s tender offer

Matthews, N.C. -- The heated battle for Family Dollar Stores rages on, with Family Dollar on Wednesday rejecting a $9.1 billion takeover bid from rival Dollar General and reaffirming its support of its deal with Dollar Tree. Family Dollar also urged shareholders not to tender their shares to the competing chain.



Last week, after repeated rejections by Family Dollar, Dollar General went hostile with its bid and took the same offer, $80 per share, directly to investors. But in a statement on Wednesday, Family Dollar called Dollar General’s offer to buy shares directly from shareholders “illusory” because it would not actually purchase the shares unless the two companies reach an agreement.



“Our board of directors, with the assistance of outside advisors and consultants, reviewed all aspects of Dollar General’s tender offer and concluded unanimously that this highly conditional offer is illusory because, as Dollar General is well aware, the offer cannot close on the terms proposed,” stated Family Dollar chairman and CEO Howard Levine. “Tenders into the Dollar General Offer will be meaningless since there is no way that Dollar General can purchase shares that are tendered.”



In rejecting Dollar General’s latest offer, Family Dollar once again raised the concern that the deal with its rival would ultimately not close due to antitrust regulatory issues.



“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,” Levine said. “Accordingly, our board has rejected Dollar General’s tender offer and reaffirmed its support of the transaction with Dollar Tree, which 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.”



In July, Family Dollar accepted an $8.5 billion buyout offer from Dollar Tree. Family Dollar has steadfastly backed this lower bid, saying regulators are less likely to interfere over antitrust concerns.