Dollar Tree Inc. (DLTR) To Buy Family Dollar Stores Inc. (FDO) For $74.5 Per Share In Cash and Stock

In breaking news today, CNBC reported about the much speculated deal, which involves the discount retail chain Dollar Tree, Inc. (NASDAQ:DLTR) buying out its smaller competitor Family Dollar Stores, Inc. (NYSE:FDO). The deal has been announced and it will involve a cash and stock transaction worth $74.5 per share.

Dollar Tree, Inc. (NASDAQ:DLTR)

The report also detailed that on the back of this development, share price of Family Dollar Stores, Inc. (NYSE:FDO) went up by 5% in pre-market trading. The report quoted the executives of  Dollar Tree, Inc. (NASDAQ:DLTR) as having said that the price valuation represents a “22.8 percent premium over Family Dollar Stores, Inc. (NYSE:FDO) closing price of as of July 25.”

The report then goes on to recall the vociferous support this deal had from activist investors like Nelson Peltz (who is on the board of Family Dollar Stores, Inc. (NYSE:FDO) and Carl Icahn, who is one of the biggest shareholders in the acquired company.

The report went on quote some shareholding pattern numbers in Family Dollar Stores, Inc. (NYSE:FDO) from Capital IQ  to call out some of the shareholders who will win from this transaction.

“This is a big win for Carl Icahn, the biggest holder as of the last filing date is Icahn Capital, and they own 9.4% of the shares [of the Family Dollar]. So Carl Icahn big win here. You have Trian Fund Management, which is Nelson Peltz investment vehicle owning 7.3%, and John Paulson’s Paulson & Company 5.7% ownership stake in Family Dollar as well.”

The report also quoted Dollar Tree, Inc. (NASDAQ:DLTR) President and Chief Operating Officer Gary M. Philbin to have described this deal as, “transformational opportunity, with the acquisitions of Family Dollar, Dollar Tree will become the leading discount retailer in North America based on the number of store locations, operating more than 13,000 stores in 48 states and five Canadian provinces.”

The report also went on to report that Wal-Mart Stores, Inc. (NYSE:WMT) is likely to  come under pressure post this deal, since it has been struggling over the past few quarters to develop smaller stores to compete with smaller competition.

Disclosure: none

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!