Dialing Up the Drama on Dollar Store Deal

Dollar General outbids Dollar Tree for Family Dollar

Published in CSP Daily News

Dollar General Dollar Tree Family Dollar (CSP Daily News / Convenience Stores)

GOODLETTSVILLE, Tenn. -- In a letter to the Family Dollar board, Dollar General Corp. has made a proposal to acquire Family Dollar Stores Inc. for $78.50 per share in cash, in a transaction valued at $9.7 billion.

Dollar General's all-cash proposal would provide Family Dollar shareholders with a "substantially superior" valuation to the $74.50 per share cash and stock offer announced by Dollar Tree, Inc. on July 28, 2014, Dollar General said.

The combination of Dollar General and Family Dollar would solidify Dollar General's position as the largest small-box discount retailer in the United States, with nearly 20,000 stores in 46 states and sales of more than $28 billion.

The company said it has undertaken significant economic and antitrust analysis with respect to the transaction, and it is confident it can "quickly and effectively" address any potential antitrust issues.

Dollar General is prepared to commit to divest up to 700 retail stores in order to achieve the requisite approvals, it said, which is approximately the same percentage of the total combined stores represented by the 500 U.S. store divestiture commitment in the Dollar Tree merger agreement.

Dollar General also said that it is prepared to enter into a definitive merger agreement that would be substantially similar to the one entered into between Dollar Tree and Family Dollar, modified as necessary to accommodate Dollar General's all-cash proposal, the antitrust matters described above and to provide a time period to close the proposed transaction consistent with that set forth in the existing agreement. In addition, Dollar General is prepared to revise the agreement to permit Family Dollar to continue to pay its regular quarterly cash dividend through closing on terms consistent with past practice.

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