Dollar General Corp took its offer of $9.1 billion to Family Dollar Stores Inc shareholders after the company rejected its offer twice. This hostile move by Dollar General seeks to win over the shareholders of the smaller rival company.
On Wednesday, Dollar General said that it had started an offer to purchase the shares of Family Dollar at $80 a share. Family Dollar rejected a sweetened offer from Dollar General last week after citing antitrust concerns.
Dollar General downplayed the concerns and has committed to sell around 1,500 stores to get rid of any competition review while offering to pay a break-up fee of $500 million if the deal fails.
According to Reuters, the company said that it would stick to the terms. Rick Dreiling, Dollar General CEO said, “We now can begin the antitrust review process and will have an opportunity to present our position directly to the FTC (Federal Trade Commission).”
On Tuesday, the shares of Family Dollar closed at $78.70, giving the company a value of $8.97 billion. Howard Levine, the company’s CEO, has the biggest stake at 8.17% as at August 5.
As at July 27, Nelson Peltz’s Trian Fund Management LP had a stake of 7.34% while on June 30 Paulson &Co Inc owned by John Paulson had a 7.04% stake.
USA Today reported that analysts said the deal would go through if Dollar General made its offer adding that Dollar General would have to go through the shareholders of Family Dollar.
The move is said to be risky because Dollar General would offer to purchase Family Dollar without accessing any confidential financial information. However, this would allow it to commence antitrust discussions with FTC.
The offer is expected to expire on October 8 at 5:00 pm, as announced by Dollar General in a statement on Wednesday morning.
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