Dollar General raises bid for Family Dollar

GOODLETTSVILLE, Tenn. — Dollar General on Tuesday sweetened its deal for Family Dollar with an enhanced acquisition proposal with an offer worth about $9.1 billion. Under the terms of the revised proposal, Dollar General would increase its all-cash proposal for all outstanding shares of Family Dollar to $80 per share. To provide even greater certainty of consummation to the Family Dollar board, Dollar General also increased the number of stores that it would be willing to agree to divest to 1,500, if ordered by the Federal Trade Commission and, as further evidence of its confidence in its ability to obtain antitrust approval, has agreed to pay a $500 million reverse break-up fee to Family Dollar relating to antitrust matters. 

 

All other terms and conditions of the proposal remain unchanged.

 

Dollar General's revised proposal provides Family Dollar's shareholders with approximately $640 million of additional aggregate value over Dollar Tree's offer and represents a premium of 31.9% over the closing price of $60.66 for Family Dollar stock on the day prior to the Dollar Tree announcement.

 

"We are confident that our enhanced proposal sufficiently addresses any concerns that led Family Dollar's board of directors to reject our prior proposal without any discussions between our companies," stated Rick Dreiling, Dollar General's chairman and CEO. "Even as a secondary antitrust review supported our previous proposal, we revised our offer to demonstrate the seriousness of our commitment. Our revised proposal provides Family Dollar shareholders with significantly increased value over the existing agreement with Dollar Tree, as well as immediate and certain liquidity for their shares. If the Family Dollar board fails to seize this opportunity to maximize value for its shareholders, we will consider taking our superior proposal directly to the Family Dollar shareholders."

 

Goldman, Sachs & Co. is acting as financial adviser to Dollar General, and Simpson Thacher & Bartlett is acting as its legal counsel.