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Dollar General Corp. (NYSE:DG) Ready To Divest More Stores To Get Free Trade Commission Approval For Acquiring Family Dollar Stores, Inc. (NYSE:FDO)

Boston, MA 09/02/2014 (wallstreetpr) – A chain of discount retail store operator in the U.S., Dollar General Corp. (NYSE:DG) is ready to sacrifice some of its stores in its bid to get the approval from the Free Trade Commission or the FTC for acquiring general merchandise retail store operator, Family Dollar Stores, Inc. (NYSE:FDO).

Divest More Stores

Dollar General disclosed that it was willing to lift the number of stores that it was ready to divest to 1.5K stores if FTC orders so as to provide higher level of certainty of consummation of the Family Dollar Stores. The company indicated that this had only showed its readiness to get antitrust approval. Dollar General Corp. (NYSE:DG) had also agreed for $500 million reverse break-up charges to Family Dollar in case the transaction failed to pass through the antitrust motion.

The latest offer of 1.5K store is more than double from the earlier 700 store divestiture commitment given in its earlier proposal, which, the company believed, was more than enough to cushion any doubts on FTC review. Dollar General Corp. (NYSE:DG) said that it arrived at the figure based on a broad analysis conducted by its antitrust economist and counsel. However, it preferred to boost its divestiture of stores to demonstrate its commitment towards Family Dollar Stores, Inc. (NYSE:FDO) shareholders.

Moreover, the company disclosed that it had commenced its antitrust analysis more than a year ago and had further refined its analysis after its August 18 proposal to acquire Family Dollar.

Sweetens Acquisition Price

Dollar General Corp. (NYSE:DG) had also sweetened its acquisition price to $80 a share of Family Dollar payable in cash with the intention to buy all outstanding shares. The company said that it would provide immediate liquidity to the shareholders of Family Dollar Stores, Inc. (NYSE:FDO).

The company also said that it was paying about $640 million more in aggregate value compared to Dollar Tree, Inc. (NASDAQ:DLTR) offer. The latest offer also indicated a premium of 31.9% from the closing price of $60.66 before Dollar Tree had bid for Family Dollar.

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email ([email protected]) or his Google+ page (https://plus.google.com/103338576216002376250).



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