Family Dollar rejects Dollar General’s USD 9.1 billion takeover bid over antitrust concerns

In another twist of events in the ongoing dollar-stores financial war, Family Dollar (FDO) on Friday turned down a USD 9.1 billion takeover bid from Dollar General (DG) over antitrust concerns.

According to the company, they had a deep discussion with the Federal Trade Commission over the probable antitrust impacts of its already signed USD 8.5 billion deal with Dollar Tree Inc.

Family Dollar CEO Howard Levine said that the decision was taken after the company’s board of directors carried a lengthy and disruptive review process and concluded that there exists “a very real and material risk that the transaction proposed by Dollar General would fail to close”.

According to the Family Dollar, the series of antitrust discussions included a large amount of evidences suggesting that the deal would not be a profitable affair for Family Dollar as the “Dollar General is a big rival and a factor in determining its prices”.

The Dollar General had submitted its takeover offer on Monday.

“The offer by Dollar General does not eliminate regulatory risk for Family Dollar shareholders,” said Ed Garden, a Family Dollar director.

Garden also holds the position of Chief Investment Officer at a major Family Dollar investor ‘Trian Fund Management’.

Meanwhile, the Dollar General remained committal to its bid for acquiring Family Dollar and said that the company is currently evaluating its next measure in this direction

The company had earlier signaled at taking over its takeover offer directly to Family Dollar shareholders.

Market analysts say the battle between the two retailers seems not to get over soon as the Dollar General is expected to revise its offer in its next step when it will leave no stone unturned to win antitrust approval.

Meanwhile, the shares of Family Dollar fell nearly 1.2 percent to the close the day at USD 79.11 on Friday. While the shares of Dollar General slumped nearly 2.3 percent at USD 63.01 at closing trade on Friday. The Dollar Tree shares rose just over 1 percent at USD 55.61 in the closing trade.