Dollar General Ups Family Dollar Bid

Today, Dollar General Corp. announced that it had sent an enhanced acquisition proposal to the Family Dollar Stores, Inc.’s board of directors. In the new proposal, Dollar General reported increasing its cash bid for all outstanding Family Dollar stock to $80 per share.

Dollar General increased the number of stores it would agree to divest to 1,500 if ordered by the United States Federal Trade Commission as evidence of the company’s confidence in its ability to obtain antitrust approval. The company also stated it would to pay a $500 million reverse break-up fee to Family Dollar relating to antitrust matters. Other terms and conditions of the proposal remain unchanged, it maintained

Dollar General asserted that its revised proposal provides Family Dollar’s shareholders with approximately $640 million of additional aggregate value above an offer from Dollar Tree, Inc. It further represents a premium of 31.9% over the closing price of $60.66 for Family Dollar stock on the day prior to the date of Dollar Tree’s offer, Dollar General noted.

“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,” said Rick Dreiling, Dollar General’s chairman and CEO, in announcing the new proposal. “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.”