Dollar General Corp. (DG) Doubts the Intention of CEO of Family Dollar Stores, Inc. (FDO) Over Acquisition

In the latest string of Family Dollar Stores, Inc. (NYSE:FDO) acquisition process, Dollar General Corp. (NYSE:DG) has questioned the motives of Howard Levine, CEO of Family Dollar Stores, Inc. (NYSE:FDO). According to Dollar General Corp. (NYSE:DG), Levine is probably motivated by self-interest in Dollar Tree, Inc. (NASDAQ:DLTR)’s acquisition of the company.

As mentioned by the CEO of Dollar General Corp. (NYSE:DG), Rick Dreiling,

“At no time during this meeting did Mr. Levine indicate that there was a process, that there was any urgency to act or that there were discussions with another potential buyer. Had we left the meeting with the belief that a sale of Family Dollar was imminent, we assure you that our course of action would have been different.”

Earlier Dollar General Corp. (NYSE:DG) offered $8.95 billion for acquiring Family Dollar Stores, Inc. (NYSE:FDO) against Dollar Tree, Inc. (NASDAQ:DLTR)’s $8.5 billion. If Dollar Tree, Inc. (NASDAQ:DLTR) takes over the Family Dollar Stores, Inc. (NYSE:FDO), Levine will head the company with his current position. On the contrary, his position is likely to change in case Dollar General Corp. (NYSE:DG) acquires the company.

Dollar General Corp (DG)

Carl Icahn criticized Levine and board of directors of Family Dollar Stores for not exploring the sale option with Dollar General Corp. (NYSE:DG). Further, he even criticized Levine to act out of self-interest instead of working for the overall benefit of the shareholders. Another point raised by Icahn was the breakup payment of $305 million that Family Dollar Stores, Inc. (NYSE:FDO) agreed to pay Dollar Tree, Inc. (NASDAQ:DLTR) if the deal is not closed. On the contrary, Dollar General Corp. (NYSE:DG) agreed to pay $305 million if its bid is accepted. Earlier Icahn mentioned purchasing 9.4 percent shares of Family Dollar Stores and pushed the sale alternative in favor of Dollar General.

This article is written by Prakash Pandey and edited by Serkan Unal.

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