Dive Brief:
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While asking for time and urging shareholders to accept its bid for an acquisition of Family Dollar, Dollar General Thursday offered no additional money beyond its $9.1 billion offer or any assurances that it would close enough stores to satisfy the Federal Trade Commission's antitrust concerns. That makes the lower Dollar Tree takeover offer of $8.5 billion more likely to prevail.
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This week two proxy advisory firms, Glass Lewis & Co and Institutional Shareholder Services, which are influential to the process, came out strongly in favor of the Dollar Tree offer for Family Dollar in something of a turnabout.
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Dollar General this week made it clear that it disagrees with the FTC’s assertion that it would need to close 3,500 to 4,500 stores, stating that it would be closer to 1,500. The discount store said it would have to argue that point with the commission in court in order to move the process forward, something most observers don’t believe will happen. Family Dollar shareholders vote on Dollar Tree’s offer next week.
Dive Insight:
The drama appears to be nearly over, with Dollar General likely fading into the sunset as Dollar Tree makes good on its original offer. Family Dollar CEO and chairman Howard Levine has said from the beginning that Dollar General’s offer brought with it problematic antitrust concerns that could scuttle any deal. Dollar General bristled under that characterization early on, even accusing Levine of acting in his own personal self-interest at the expense of his company. But proxy firm ISS, in throwing its weight toward the Dollar Tree deal this week, articulated his position nicely Wednesday:
"Dollar General's near-silence on regulatory progress - particularly its failure to meaningfully follow through on its own unforced commitment to provide a meaningful update in December - speaks volumes," ISS said in its statement.
