Family Dollar rejects Dollar General's $9.7 billion bid, fires b - Cincinnati News, Weather, Sports from FOX19 NOW-WXIX

Family Dollar rejects Dollar General's $9.7 billion bid, fires back at CEO's letter


Officials from Family Dollar says the discount chain's Board of Directors has unanimously rejected a proposal made by Dollar General to merge the companies.

The board cited antitrust regulatory considerations in its rejection of the deal.

Earlier this week, Dollar General announced it was offering about $9.7 billion for the discounter in an effort to trump Family Dollar's proposed merger with Dollar Tree.

Dollar General Corp. said Monday that it would pay $78.50 per share in cash, 3 percent higher than the Matthews-based company's Friday closing price of $76.06.

Last month Dollar Tree Inc. made an $8.5 billion bid for Family Dollar. It offered to pay $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share they own.

Family Dollar's board had previously unanimously approved the Dollar Tree deal.

Wednesday, Dollar General's CEO sent an open letter, that was posted on its website, to the Family Dollar Board of directors. The letter blasts Family Dollar CEO Howard Levine, saying he gave no indication that the company was looking to merge with anyone other than Dollar General.

The letter cited a meeting with Levine held days before the company announced its merger intentions with Dollar Tree.

"At no time during this meeting did Mr. Levine indicate that there was a process, that there was any urgency to act or that there were discussions with another potential buyer," the letter stated.

"In fact, Mr. Levine's response to specific questions posed by our representatives gave us quite the opposite impression. Had we left the meeting with the belief that a sale of Family Dollar was imminent, we assure you that our course of action would have been different."

The letter than urges the board to consider the deal with Dollar General saying it is a "superior proposal for your shareholders (although perhaps not for Mr. Levine personally)."

Levine responded to the letter in Family Dollar's rejection of the deal.

"I would also like to note that Dollar General's letter, sent late last night, contained blatant mischaracterizations and did nothing to address the antitrust issues in Dollar General's proposal," Levine said.

"At the June 19 meeting, representatives of Dollar General stated that they were not interested in pursuing a strategic transaction at that time," company officials said in reference to Dollar General's letter to the board.

"At the time of the June 19 meeting, Family Dollar was bound by a customary non-disclosure agreement with Dollar Tree that prohibited disclosure of the existence of any discussions with Dollar Tree."

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