What might sound a bit discomforting for the management of Family Dollar Stores, Inc. (NYSE:FDO), the shareholders of the company voted against the acquisition bid of Dollar Tree, Inc. (NASDAQ:DLTR). The company has adjourned the meeting to January 22, 2015 and majority of shareholders voted in favor of the adjournment.
The financial restructuring plans of the official supplies company struck a deadlock after receiving a higher hostile bid from Dollar General Corp. (NYSE:DG), which offered $9.1 billion against Dollar Tree, Inc. (NASDAQ:DLTR)’s $8.5 billion offer. Earlier, the management of Family Dollar said that they are against the offer from Dollar General as it will not be approved by the federal regulators. On the other hand, Dollar General Corp. (NYSE:DG) has announced to dissolve up to 1,500 stores just to get the regulatory approvals.
The analysts are opined that this delay would offer more time to the Federal Trade Commission (FTC) to consider Dollar General Corp. (NYSE:DG)’s offer, according to Joseph Feldman, Telsey Advisory Group.
During the meeting, as many as 72 million shares favored the adjournment against 15 million opposing it. Efraim Levy, S&P Capital IQ, said,
“Investors are interested in having a greater hearing of the higher bid by Dollar General. I would have been surprised if voters had accepted the current offer.”
The analysts are even speculating higher offer from Dollar Tree, Inc. (NASDAQ:DLTR) because of the extension of the voting deadline. Some analysts even said that the meeting is likely to delay even after January 22, as the voters would like to examine the view of antitrust regulators on Dollar General Corp. (NYSE:DG)’s offer.
Brian Yarbrough, Edward Jones analyst, said,
“Nothing is going to happen on this until the Federal Trade Commission clarifies how many stores Dollar General would have to sell to avoid antitrust problems. That can take four to six months, so we could see this thing pushed out to March.”
This article has been written by Prakash Pandey.