Dollar General Ups Takeover Offer, Threatens Hostile Bid

Dollar General is already the largest small-box retailer in the U.S. and has been expanding into new states in recent years. Credit: Dollar General

In a letter to Family Dollar’s board of directors, Goodlettsville-based Dollar General has increased its $10 billion bid by roughly two percent after being rejected in favor of a smaller offer from Dollar Tree.

Family Dollar had expressed concerns that a merger with Dollar General would make such a massive company – with a combined 20,000 stores – that the deal would create anti-trust problems. To that end, Dollar General has offered to sell off twice as many locations – a total of 1,500. And to top it off, Dollar General has put $500 million on the table in what it describes as a “reverse break-up fee.” If the deal doesn’t go through, Family Dollar would keep the money.

In a statement, Dollar General suggests it may become more hostile in its takeover attempt.

“If the Family Dollar Board fails to seize this opportunity to maximize value for its shareholders, we will consider taking our superior proposal directly to the Family Dollar shareholders,” CEO Rick Dreiling says.