Dollar General Corp. (DG) Raising Bid for Family Dollar Stores Inc. (FDO)

CNBC’s Andrew Ross Sorkin said that sources depicted Dollar General Corp. (NYSE:DG) intentions of bidding $80 per share for Family Dollar Stores Inc. (NYSE:FDO), the total value offered being about $9.1 billion. Dollar General Corp. (NYSE:DG) also pledges to divest up to 1,500 stores if required by the Federal Trade Commission (FTC) and to supply $500 million as a reverse break-up fee, which shows their confidence that the transaction would go through.

Dollar General Corp. (NYSE:DG)

Family Dollar Stores Inc. (NYSE:FDO) has rejected an earlier offer of $78.5 per share from Dollar General Corp. (NYSE:DG) on August 21, while at the same time considering a cash and stock proposal from Dollar Tree Inc. (NASDAQ:DLTR). The proposal was worth a lot less, amounting to $74.50 per share, making it somehow inferior to the recent bid.

Andrew Ross Sorkin seemed quite confident in the fact that the acquisition is at least planned to take place, with all the details analyzed and all the parties satisfied. Besides the quantitative details of the transaction, he mentioned the news about Dollar General Corp. (NYSE:DG) engaging and additional counsel, Boies, Schiller & Flexner LLP, to independently review its antitrust work. In fact, even the first proposal has been approved by the antitrust entities, although rejected by Family Dollar Stores Inc. (NYSE:FDO). However, the refusal just led to a series of new conditions for the acquisition.

“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,” Rick Dreiling, Dollar General’s Chairman and Chief Executive Officer, was quoted as saying in a statement from Dollar General Corp. (NYSE:DG).

The stakes and interests are currently dim as no sources have concrete data regarding the faith of Family Dollar Stores Inc. (NYSE:FDO). So far, no information about Dollar Tree Inc. (NASDAQ:DLTR) further decisions is made public. Will the latter just give up its personal interests to a better bidder or will it come back with a better alternative are questions to live on for a while.

Disclosure: none

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