Dollar General on Wednesday affirmed commitment to its pursuit of rival discounter Family Dollar Stores in the wake of press speculation that mandated divestitures may be more than expected.
Family Dollar in the meantime said it was delaying its shareholder vote on its agreement to be acquired by another rival, Dollar Tree, from Dec. 11 to Dec. 23 so it can examine the impact of the Federal Trade Commission review of that deal.
A New York Post report Wednesday said Dollar General may have to divest up to 4,000 stores to meet approval of the FTC to acquire Family Dollar, more than twice the 1,500 stores DG has said it was prepared to divest to complete the deal. The report cited anonymous sources. SN was unable to confirm its accuracy. The FTC does not comment on ongoing investigations.
Family Dollar in a statement said it was in discussions with the FTC over divestitures in the Dollar Tree deal and expects an update on the status of the FTC review by the end of the first week of December. Pushing the meeting back, it said, would allow time to consider the impact of that review.
Wednesday’s events were the latest twists in a drama that has played out since Family and Dollar Tree announced plans to merge in July. Dollar General subsequently made a higher offer of $80 a share vs. Dollar Tree’s $74.50 deal, but Family Dollar has stuck with the original offer, saying it was not dependent on FTC approvals.
Family Dollar shares were down slightly Wednesday to $78.45, indicating investors still believe Dollar General could prevail.
One analyst, Dan Binder of Jefferies, in a note to clients Wednesday openly speculated over potential bias in the Post piece, saying the 4,000 store figure “seems very high.” The article, Binder said, adds “one more force to add pressure to DG to sweeten its offer and discredit the current [DG] offer as we draw closer to the vote.”
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