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Is Dollar General Corp. (NYSE:DG) Still In the Reckoning of Purchasing Family Dollar Stores, Inc. (NYSE:FDO)?

Boston, MA 10/13/2014 (wallstreetpr) – Dollar General Corp. (NYSE:DG) has been asked to provide additional information relating to its plan to acquire all outstanding shares of Family Dollar Stores, Inc. (NYSE:FDO). The Federal Trade Commission’s move comes nearly after ten days of Dollar General announcing its intention to extend the tender offer to buy Family Dollar shares.

While the company expected such requests for the second time, it could be a headache for Family Dollar Stores, who have committed to the agreement with Dollar Tree, Inc. (NASDAQ:DLTR).

Second Request From FTC

In a statement, the company said that the second request was issued as per the antitrust improvements act of 1976 and was part of the regulatory process of review. Dollar General Corp. (NYSE:DG) indicated that it was still committed to the planned acquisition of Family Dollar. For this, it expressed its readiness to cooperate with the FTC so as to get its clearance for antitrust.

The latest request meant that the waiting period would be extended by 30 days after both the companies provide the requested information to the FTC. Both Dollar General and Family Dollar indicated that they would submit the information sought by the FTC.

Original Deal

Both Dollar General and Dollar Tree, Inc. (NASDAQ:DLTR) have been engaged in the process of acquiring Family Dollar Stores. However, Family Dollar Struck a deal with Dollar Tree before Dollar General entered the fray. Dollar Tree provided a cash and stock deal of $8.5 billion to buy Family Dollar Stores.

Though Dollar General Corp. (NYSE:DG) entered the acquisition fray late, it offered a much higher price than Dollar Tree. Family Dollar has rejected the offer and preferred to go with the agreed deal citing antitrust rules. Undeterred by the rejection of its proposal, Dollar General has not only boosted its bidding price to $80 a share, it has also launched a tender offer to buy all the outstanding shares of Family Dollar. It valued Family Dollar $9 billion.

However, the response from Family Dollar to Dollar General’s tender was tepid. As a result, it extended the tender offer deadline to till October end. Now with the FTC seeking more information, Dollar General is still in the reckoning of acquiring Family Dollar Stores, Inc. (NYSE:FDO).

Published by Duncan Oleinic

Duncan Oleinic is from New Yourk. After graduating with a degree in physics, he began his career as an analyst in a broking firm. Through this experience he was able to advance to the role of correspondent for a U.S based financial news provider, where he worked from 2001 to 2007. He subsequently joined a merchant banking firm as a financial analyst focused on valuing unlisted companies in the sub-continent. Over the course of his two years here, he performed valuations of several media companies which were later acquired by peers.

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