US DISCOUNTER Dollar General yesterday went hostile in its $9.1bn (£5.64bn) bid for rival Family Dollar, making a direct approach to its shareholders after twice being shunned.
The move could jeopardise Family Dollar’s agreement to sell itself to fellow discounter Dollar Tree for a lower cash-and-stock deal of $8.5bn, or $74.50 per share.
Dollar General announced that it had initiated a cash tender offer to buy all shares of Family Dollar for $80 per share, an offer that was rejected last week by the smaller chain.
Family Dollar said the offer did not address antitrust concerns – the same reason it cited for turning down Dollar General’s first proposal.
It added that it still supported its agreement with Dollar Tree, but was reviewing the tender offer – which expires on 8 October – and would advise shareholders of the board’s position at a later date.
Dollar General has sought to assuage the antitrust concerns by committing itself to sell up to 1,500 stores and offering to pay $500m as break-up fee if the deal failed to clear American government watchdog reviews.
“We now can begin the antitrust review process and will have an opportunity to present our position directly to the [regulator] Federal Trade Commission,” Dollar General chief executive Rick Dreiling said.