Dollar General Extends Lucrative Offer to Buy Rival

In Reports, What's New, Industry News by Jeff Prine

Dollar-General-shopping-basket-crop-smallGoodlettsville, TN—Once again Dollar General Corp. is trying to beat out Dollar Tree in a bidding war for Family Dollar Stores. This time, after having its offer rejected, Dollar General is extending its offer to acquire all of Family Dollar for $80 a share. The new deadline would be Oct. 31 at 5 p.m.

As part of this hostile takeover attempt, Dollar General said it would be willing to divest up to 1,500 stores, and pay Family Dollar a $500 million reverse break-up fee if the agreement did not close due to antitrust issues.

Dollar Tree Inc.’s bid is less robust, $74.50. While Dollar General’s proposal represented a premium of 31.9% over Family Dollar’s closing price as of Jul 25.

Should Dollar General succeed in its bid, the combined Dollar Stores would create a giant among retailers, rivaling Walmart and Target. The combined company will have the capacity to operate close to 20,000 stores in 46 states. Dollar General expects revenues to hit more than $28 billion and the deal to generate synergies of $550 million to $600 million at an annual rate three years after the deal is closed.

Goldman, Sachs & Co. is acting as financial advisor to Dollar General. KKR Capital Markets and MCS Capital Markets are advising Dollar General on the financing. Simpson Thacher & Bartlett LLP is acting as its legal counsel.


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