NEW YORK: Dollar General yesterday sweetened its bid to acquire Family Dollar and threatened to launch a hostile takeover campaign in the latest twist in a bidding war among discount retailers.
Dollar General, the largest US deep-discount chain, raised its all-cash bid for Family Dollar to $80 per share from $78.50, while also agreeing to pay Family Dollar $500m if a deal is not completed for antitrust reasons.
Dollar General said its latest bid would provide Family Dollar shareholders with about $640m in greater value compared with a proposal by rival Dollar Tree that has been favoured by the Family Dollar board.
“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,” said Rick Dreiling, chief executive of Dollar General.
“If the Family Dollar Board fails to seize this opportunity to maximize value for its shareholders, we will consider taking our superior proposal directly to the Family Dollar shareholders.”
Dollar General’s Tuesday bid marks its second effort to woo Family Dollar, the number two company in the discount sector, after Family Dollar in August snubbed an earlier proposal worth $9.7bn.
On August 21, Family Dollar rejected the bid by Dollar General, saying it could run afoul of US anti-monopoly rules. Instead, Family Dollar, said it still favored a $9.2bn offer from Dollar Tree.
AFP
