Thursday, August 21, 2014

Family Dollar rejects Dollar General's takeover bid; cites antitrust issues

Family Dollar on Thursday rejected a takeover bid by Dollar General "citing 'significant antitrust issues' related to that offer," Michael de la Merced reports for The New York Times. Dollar General earlier this month offered $400,000 more than Dollar Tree offered last month for Dollar General, which is mostly located in poor rural and urban areas. (Associated Press photo by Lance Murphey: Howard Levine, the chief executive of Family Dollar)

"The move sets up a potentially bruising battle for control of one of the country’s biggest dollar discount stores, as retailers seek to cater to America’s working poor," de la Merced writes. "Raising antitrust as an issue—as opposed to simply objecting to the price—suggests that the target company plans to resist, since that defense could hurt any combination of the two down the road."

"Family Dollar acknowledged that it had held talks with Dollar General several times over the last year and a half. During that time, its advisers were studying—and becoming more convinced—that a union would not pass regulatory muster," de la Merced writes. "Compounding matters, Dollar General declined to attend a meeting in June to discuss antitrust issues."

"By the time the two sides met again, on June 19, Dollar General expressed no interest in pursuing a deal," de la Merced writes. "And Family Dollar had by then signed a nondisclosure agreement with Dollar Tree that prevented any mention of their deal talks." (Read more)

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