Dollar General Goes Hostile with its $9.1 Billion Deal for Family Dollar

By Sarah Price - 10 Sep '14 13:26PM

Dollar General, the famous discount retail chain, announced Wednesday that it will directly take its bid to acquire rival firm Family Dollar to their shareholders, hence, going hostile as promised.

Dollar General said that it will make an all-cash tender to take over all outstanding stock of Family Dollar for $80 per share. The hostile offer is set to end by Oct. 8 2014 by 5:00pm EST/ New York Time. The offer shall be valid after that date only if an extension is agreed upon.

The company also said that it will commence an anti-trust approval process with the Federal Trade Commission to file for clearance under the Hart-Scott-Rodino ("HSR") Act.

"Our offer provides Family Dollar shareholders with significantly greater value than the existing agreement with Dollar Tree, as well as immediate and certain liquidity for their shares," Rick Dreiling, chairman and CEO of Dollar General, said in an official statement.

"Additionally, we now can begin the antitrust review process and will have an opportunity to present our position directly to the FTC. 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 FTC," Dreiling added.

Last week, Dollar General upped its acquisition offer from $78.50 per share to the current price and also warned that it would take its enhanced offer to the shareholders if this proposal was rejected by Family Dollar's board.

However, Family Dollar's board rejected the offer once again but Dollar General said that it remained committed to seal the deal. Family Dollar has already accepted a bid from Dollar Tree for $59.60 in cash and shares worth $14.90 for each unit of Family Dollar in early August.

But Dollar General argues that their offer is better and would work best for the shareholders. It was even ready to shutter 1,500 stores to close the deal.

Goldman Sachs and Citigroup are acting as the financial advisors for Dollar General and the company has lined up loans of about $12.25 billion for the merger. If they get the shareholders' nod, the deal will probably close by November this year.