MATTHEWS, N.C.-Citing antitrust issues, Family Dollar’s board of directors has unanimously rejected Dollar General’s bid to acquire its dollar-store rival, three days after Dollar General made the proposal.
On Aug. 18, Dollar General announced its all-cash bid of about $9.7 billion to purchase Family Dollar. In today’s statement, the Family Dollar board unanimously reaffirmed its recommendation in support of the merger agreement with Dollar Tree. Family Dollar and Dollar Tree announced their agreement for Dollar Tree to acquire Family Dollar for about $8.5 billion in late July.
In its statement, Family Dollar said its board had determined that the Dollar General proposal, if carried out, would have raised “significant antitrust issues,” although the statement did not further define these issues. The board, along with its financial and legal advisors, conducted “an extensive antitrust analysis” and concluded that the Dollar General deal was not likely to be completed under its proposed terms.
The statement also referred to a letter sent by Dollar General’s chairman and CEO, Rick Dreiling, to the Family Dollar board last night. In his letter, which mentioned media reports of Family Dollar’s antitrust concerns, Dreiling said Dollar General stated in its offer letter that it was “confident that we will be able to quickly and efficiently resolve any potential antitrust issues.” Dreiling added that “the number of store divestitures contained in our offer letter is more than sufficient to take this issue completely off the table.”
In the Family Dollar statement, Levine said Dreiling’s letter “contained blatant mischaracterizations and did nothing to address the antitrust issues in Dollar General’s proposal.” However, the statement was not specific about the mischaracterizations. Contacted by HFN, Family Dollar had not responded by press time.