Family Dollar Stores Inc. has rejected Dollar General Corp.’s sweetened $9.1 billion takeover offer based on antitrust concerns.
Dollar General last month upped its offer to the current level from an earlier bid of $8.5 billion rejected by Family Dollar.
Family Dollar held to its preliminary acceptance in July of Dollar Tree’s offer of $74.50 a share, or about $8.5 billion. Dollar Tree has committed to divest as many stores as necessary to address Federal Trade Commission antitrust concerns.
Family Dollar noted that it has a responsibility to consider alternative bids and share information with interested parties, “but only if the board is able to determine that failure to do so would be inconsistent with its fiduciary duties and that the unsolicited, written proposal from the competing bidder would be reasonably expected to lead to a proposal that is not only financially superior, but also ‘reasonably likely to be completed on the terms proposed.’”
Howard Levine, chairman and chief executive officer of Family Dollar, said that the company’s board, in consultation with advisers and consultants, concluded that a deal with Dollar General “is not reasonably likely to be completed on the terms proposed. There is a very real and material risk that the transaction proposed by Dollar General would fail to close after a lengthy and disruptive review process.”