You’d think after two rejections and the proverbial cold shoulder Dollar General would pick up its dignity and go back to hawking dollar times. But no, the dollar store giant just won’t give up on its dream of making dollar love with Family Dollar; this time its taking the hostile route and bringing its thick wallet directly to the smaller store’s shareholders.
According to a report from Bloomberg, Tennessee-based Dollar General brought the same $9.1 billion offer to shareholders that Family Dollar executives dismissed last week.
By taking the offer to shareholders, Dollar General has a good chance of winning the dollar store wars unless Dollar Tree, which is the chosen suitor of Family Dollar, ups its bid.
The sordid dollar store love triangle began back in July when Dollar Tree made an $8.5 billion bid for North Carolina-based Family Dollar. Not one to feel left out, Dollar General proceeded to provide an unsolicited bid of $8.95 billion for the smaller chain.
But Family Dollar wasn’t feeling the love and rejected the offer citing “significant antitrust issues” because the two chains have similar business models. Both Dollar General and Family Dollar sell items at different dollar price points, catering to low-income shoppers, while Dollar Tree caters to more middle-income shoppers and sells most items at $1.
Dollar General came back with a second bid of $9.1 billion and in an attempt to ease Family Dollars’ anti-trust review fears it proposed closing 1,500 of the potentially combined companies 20,000 stores.
Yet, that still wasn’t enough and Family Dollar rejected the bid, choosing instead to stay with its true love, Dollar Tree.
Officials with Dollar General say taking its quest to shareholders will put the company’s values to the test.
“We now can begin the antitrust review process and will have an opportunity to present our position directly to the FTC,” Dollar General CEO Rick Dreiling says in a news release. “As we previously have stated, we are confident in the results of our antitrust analysis, and we look forward to a constructive dialogue with the Federal Trade Commission.”
Dollar General Takes Family Dollar Offer to Shareholders [Bloomberg]
by Ashlee Kieler via Consumerist
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