Winding up its contentious acquisition initiative with Dollar Tree Stores Inc., Family Dollar Stores said a preliminary vote count at the company’s special meeting of stockholders held today indicated that participants approved the proposed merger with Dollar Tree. Dollar General, which had launched a competing bid, called the vote a “loss” for Family Dollar shareholders.
Based on the preliminary count, participants voted 84 million shares in favor of the merger proposal. The vote for the acquisition by Dollar Tree represents 74% of the total outstanding and 89% of the total shares voted.
“We are pleased with the outcome of today’s vote, and I want to thank Family Dollar stockholders for their support throughout this process,” Howard Levine, chairman and CEO of Family Dollar, said in announcing the preliminarily results. “The Family Dollar board of directors and management team have worked diligently to advance the best interests of all of the company’s stockholders, and we are grateful for the support we received for the merger proposal. We look forward to completing the transaction with Dollar Tree and remain excited about the opportunity that this combination will create for our stockholders, team members, customers and other stakeholders.”
In a statement issued by the retailer, Dollar Tree CEO Bob Sasser said, “Today’s vote of approval by Family Dollar shareholders represents a crucial step toward combining Dollar Tree, North America’s leading fixed-price point discount retailer, with Family Dollar, a leading multi-price point retailer with a 50-plus year history of serving low- and middle-income customers. By adding Family Dollar to our portfolio of brands, Dollar Tree will soon operate more than 13,000 stores in 48 states and five Canadian provinces with annual sales exceeding $18 billion. This merger enhances our geographic footprint and diversifies our business model. We intend to operate and grow both banners. At Dollar Tree stores, everything is $1 while Family Dollar stores will continue to serve low- to middle-income customers with name brand consumables, home basics, variety and seasonal products at discount store prices. By utilizing the $1 fixed-price point in Dollar Tree and multi-price points at Family Dollar, we will deliver even greater value and choice to a broader range of consumers.”
The Family Dollar/Dollar Tree merger remains subject to United States Federal Trade Commission approval. As previously announced, Dollar Tree and Family Dollar have agreed to provide the FTC with four weeks’ notice prior to closing their merger initiative, they pointed out. Dollar Tree expects to initiate this four-week notice period after it has executed a consent decree with the FTC’s Bureau of Competition permitting clearance and a merger closing as soon as March, the retailer related.
The parties will release final election results after votes have been tabulated and certified by the independent inspector of elections, IVS Associates, which should occur next week, Family Dollar maintained.
Dollar General offered a higher dollar value bid for Family Dollar after that retailer and Dollar Tree announced their merger agreement last year. However, both Dollar Tree and Family Dollar insisted that Dollar General would have to divest far more stores to win FTC acquisition approval than would occur as part of the initial deal, making the later bid costlier and more difficult to execute.
However, in a statement, Rick Dreiling, Dollar General CEO said, “Today’s vote is a loss not only for Family Dollar shareholders, but also for consumers across the country who will not have the opportunity to benefit from the cost savings and efficiencies that we believe would have been created by a merger between Dollar General and Family Dollar. As we have said throughout this process, the scale of this combination would have provided better value and greater selection to customers of both Dollar General and Family Dollar. Despite our best efforts over the past few months, Family Dollar’s lack of engagement and a contracted transaction timeline ultimately prevented us from completing this transaction.”