Family Dollar directors have unanimously turned down the $9.7 billion buyout bid from Dollar General, saying the offer comes with too many antitrust risks.
The rejection had been expected and leaves intact Family Dollar's agreement to sell to Dollar Tree for $9.2 billion. Dollar General Chairman and CEO Rick Dreiling earlier this week said he didn't see any unnecessary regulatory risks in his team's bid, which calls for the sale of about 700 locations out of a combined store base of nearly 20,000.
The Family Dollar board thinks very differently on the topic.
"As is customary, the Board may commence negotiations and due diligence access only if, among other factors, the Board determines that a proposal from a competing bidder is reasonably expected to lead to a superior proposal that 'is reasonably likely to be completed on the terms proposed,'" the company said in a statement this morning. "The Family Dollar Board, after consultation with its financial and legal advisors who have conducted an extensive antitrust analysis, determined that the Dollar General proposal fails to satisfy this requirement. The Board’s decision follows the unanimous recommendation of a committee of four non-management independent directors that has been overseeing the Company’s consideration and exploration of strategic alternatives since January 2014."
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