Dollar General makes $9.7B bid for Family Dollar

The fight for Family Dollar (NYSE:FDO) is heating up. Dollar General (NYSE:DG) has made a proposal to acquire Family Dollar Stores for $78.50 per share in cash, in a transaction valued at $9.7 billion.

Dollar General's offer comes two weeks after Dollar Tree announced its bid for the chain in a deal valued at $8.5 billion. That deal was unanimously approved by both boards of directors, but Dollar General's interest stalls that merger.  

Dollar General was reportedly weighing interest in the chain last week. Stated reasons include solidifying Dollar General's position as the largest small-format discount retailer with nearly 20,000 stores in 46 states and sales of over $28 billion and interest in Family Dollar's management team.

The proposal was conveyed this morning in a letter to Family Dollar's Board of Directors.

"For Family Dollar shareholders, our proposal is financially superior to the current transaction agreement with Dollar Tree and would provide Family Dollar shareholders with a substantial premium and immediate liquidity for their shares," said Rick Dreiling, Dollar General's chairman and CEO. "For Dollar General shareholders, the proposed combination of Dollar General and Family Dollar would be a significant strategic opportunity to create immediate and lasting shareholder value. For both Dollar General and Family Dollar customers, we would be able to provide better value and greater selection.

"We have the utmost respect for Family Dollar, its leadership and its employees," he said. "We look forward to expeditiously entering into constructive discussions with Family Dollar in order to sign a definitive merger agreement that provides enhanced value to Family Dollar shareholders and enables Dollar General to realize the benefits of this combination."

The proposed transaction values Family Dollar at an enterprise value of approximately $9.7 billion.

For more:
-See this Dollar General announcement

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