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Family Dollar Opposes Dollar General's Hostile Buyout Bid

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Dollar General Takes Offer For Family Dollar To Shareholders
Daniel Acker/Bloomberg via Getty Images
MATTHEWS, N.C. -- Family Dollar has told shareholders to reject an unsolicited, $9.1 billion takeover bid from its rival, Dollar General.

Family Dollar (FDO) is currently trying to arrange a sale to another bargain chain, Dollar Tree (DLTR).

After repeated rejections by Family Dollar, Dollar General (DG) went hostile with its bid last week and took the same offer, $80 a share, directly to investors in Family Dollar.

Family Dollar accepted an $8.5 billion buyout offer from Dollar Tree in July. The bid includes $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for a total of $74.50 for each share held. Family Dollar has backed the bid, saying regulators are less likely to interfere over antitrust concerns.

In response, Dollar General has said that it is willing to divest up to 1,500 stores if the Federal Trade Commission requires it. The company also volunteered a $500 million reverse breakup fee if the deal hits any antitrust snags.

Family Dollar began looking for buyers as sales began sagging. The company has cut prices and closed stores to drive sales and lower its costs. In June, activist investor Carl Icahn urged the company to put itself up for sale.

Dollar General didn't immediately respond to an email seeking comment.

Shares of Family Dollar Stores, based in Matthews, North Carolina, are trading close to all-time highs, as are shares of Dollar General, based in Goodlettsville, Tennessee.

Dollar General's Hostile Bid for Family Dollar and More

 

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