Dollar General Bids $9.7 Billion to Acquire Family Dollar
Dollar General has bid a per share price of $78.50 or approximately $9.7 billion to acquire Family Dollar, said the company on Monday in a prepared statement. The offer is higher than the $8.5 billion offer made by Dollar Tree back in the latter part of July.
Dollar Tree offered to pay Family Dollar shareholders $59.60 in cash as well as $14.90 towards shares of Dollar Tree for each share of Family Dollar they own.
The two companies put the transactions at a value of $74.50 a share.
The CEO at Dollar General Rick Dreiling said on Monday that for shareholders at Family Dollar, the proposal Dollar General offered is financially superior to that of the one between Family Dollar and Dollar Tree. He added that the offer would provide shareholders at Family Dollar with a large premium and liquidity immediately of their shares.
The premarket shares of Family Dollar were trading close to 5% higher as of Monday morning at $79.74, which suggested that the markets are anticipating yet one higher bid.
In trading before the bell, Dollar General’s shares were soaring, gaining over 10% to $63.32 an increase of more than $5.83. The loser as far as reaction by the stock market was Dollar Tree. The company saw shares fall by just less than $1 or approximately 1.5% to sit at $54.79 prior to Wall Street’s opening bell.
If the superior bid by Dollar General is sufficient to seal a deal for rival Family Dollar, then Dollar General would seal its position as the largest small box U.S. discount retailer, said the company in a press release on Monday announcing its bid.
Dollar General has 11,000 stores across 40 states and annual revenue that exceeds $17.5 billion. If it were to add the Family Dollar stores, with revenues of more than $10.4 billion in 8,000 stores across 46 states, the combined sales would be close to $28 billion.