Dollar General Corp. (DG) Plans Tender Offer for Family Dollar Stores, Inc. (FDO)’s Shares

Family Dollar Stores, Inc. (FDO)

Nearly one month after its first acquisition proposal for Family Dollar Stores, Inc. (NYSE:FDO), Dollar General Corp. (NYSE:DG) is all set to take the route of a hostile takeover. The company will issue a tender offer with $80 share price to its shareholders, as reported by WSJ.

The management of Family Dollar Stores, Inc. (NYSE:FDO) is inclined towards the offer made by Dollar Tree, Inc. (NASDAQ:DLTR) at $8.5 billion, which is lower than $9.1 billion offer from Dollar General Corp. (NYSE:DG). With no other option, Dollar General Corp. (NYSE:DG) is all set to follow the only option left, hostile takeover.

Under the tender offer, Dollar General Corp. (NYSE:DG) plans to persuade the investors to reject Dollar Tree, Inc. (NASDAQ:DLTR)’s offer. Analysts do consider it as a risky option because of lack of insider financial information about Family Dollar Stores, Inc. (NYSE:FDO). Dollar General has already said earlier that it would be willing to close up to 1,500 stores post merger for a successful and objection-less transition.

Family Dollar Stores, Inc. (FDO)

On the contrary, Family Dollar Stores, Inc. (NYSE:FDO) has placed antitrust concerns against the offer made by Dollar General. Considering the fact that both the stores offer similar categories of products ranging from household goods to consumable at different prices, the claims of Family Dollar seems legit. Dollar Tree, Inc. (NASDAQ:DLTR), on the contrary, offers each and everything for a dollar.

Earlier Family Dollar Family Dollar Stores, Inc. (NYSE:FDO) has piled up several evidences supporting the fact that Dollar General Corp. (NYSE:DG) is a business rival. Further, the placement of nearly 1,500 Family Dollar stores is purely based upon position of Dollar General Corp. (NYSE:DG) stores. Dollar Tree, Inc. (NASDAQ:DLTR) stated that the management is ready to close as many sores as required for the merger.

This article has been written by Prakash Pandey.

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