Dollar General made another bid for Family Dollar, this one worth $9.1 billion or $80 per share, raised from the original proposition of $78.50. There were concerns that the merger would run afoul of antitrust rules, but Dollar General is taking steps to prevent this, including an offer to shutter 1, 500 of its stores, up from the original proposed number of 700. In addition, Dollar General management said it would pay a reverse breakup fee of $500 million to Family Dollar to deal with anti-trust objections. Shares of Family Dollar and Dollar General rose on news of the revised bid.
Dollar General management insists that its prior offer was not at odds with concerns of creating a monopoly, but it would take these steps to “demonstrate the seriousness of our commitment.” Family Dollar had initially accepted a takeover offer from Dollar Tree for a value of $74.50. Anti-trust concerns are not as weighty in the case of a potential takeover by Dollar Tree, since all of its merchandise is sold at one dollar or less, and both Family Dollar and Dollar General sell items that can cost more than one smacker.
Carl Icahn, who owns a considerable stake in Family Dollar, urged the company to put itself up for sale when it underwent financial problems with slowing sales.