Boston, MA 08/21/2114 (wallstreetpr) – According to a report made public by Family Dollar Stores, Inc. (NYSE:FDO), its board has rejected a non-binding proposal from Dollar General Corp. (NYSE:DG) on the basis of antitrust regulatory issues. Other than it, FDO board also reaffirmed its recommendation to a merger that is expected to take place between these two companies.
Road so far:
At the time of negotiating the T&C of the merger agreement with Dollar Tree, FDO board took care of a few things like fiduciary duties. It means that Family Dollar Stores, Inc. (NYSE:FDO)’s board will be able to terminate the agreement if the due diligence matters don’t satisfy the T&C of the agreement. Although the board of FDO insured that the due-diligence would only be executed if the board finds another proposal competitive and up to the expectations.
When Family Dollar Stores, Inc. (NYSE:FDO) board consulted with its law and financial advisors, it found that the proposal that was offered by the Dollar General Corp. (NYSE:DG) board didn’t meet the T&C of the proposal. After doing in-depth research and due-diligence, FDO board finally decided to reject the proposal without any warning. The decision of FDO board has been followed by the unanimous recommendation of four non-management independent directors’ committee. It consists of people like Ed Garden; Glenn A. Eisenberg; Harvey Morgan; and George R. Mahoney, Jr.
When reporters tried to reach Howard R. Levine, CEO and Chairman of Family Dollar Stores, Inc. (NYSE:FDO), he said, “We have a team of insider and outsider experts who are looking after this issue carefully since the beginning of the year. Everything is being done in accordance with preliminary proxy statement of the company which was filled by Dollar General Corp. (NYSE:DG) with SEC on August 11, 2014.” The board of directors found that all the conditions of the agreement were not fulfilled by the company; hence, they decided to reject the proposal immediately. According to reports, Family Dollar Stores, Inc. (NYSE:FDO) has appointed Morgan Stanley & Co. LLC as a financial advisor while Cleary Gottlieb Steen & Hamilton LLP as the legal advisor to look after this issue.