Retail
Did Family Dollar Reject Dollar General's Cash to Preserve Levine's Job?
Published:
Last Updated:
The given reason for sticking with the lower offer is “antitrust regulatory considerations.” A special committee of Family Dollar’s board comprised of four independent directors found that the Dollar General bid did not meet a requirement that a competing bid that can reasonably be expected to result in a superior bid is also “reasonably likely to be completed on the terms proposed.” In other words, Family Dollar believes that regulators will kill the Dollar General deal, so why waste any more time.
What’s more fun, though, is to read what Dollar General had to say about its meetings with Family Dollar and that company’s chairman and CEO Howard Levine:
[O]n more than one occasion at such meetings, Howard Levine expressed his own interest in the social issues of a combination, including, among other things, his desire to be chief executive officer of the combined companies. We cannot help but question whether Dollar General’s failure to embrace such requests by Mr. Levine weighed into Family Dollar’s decision to pursue an agreement with Dollar Tree.
READ ALSO: 10 Brands That Will Disappear in 2015
Levine responded in Family Dollar’s rejection announcement Thursday morning:
I would also like to note that Dollar General’s letter, sent late last night, contained blatant mischaracterizations and did nothing to address the antitrust issues in Dollar General’s proposal.
Activist investor Carl Icahn told The Wall Street Journal earlier this week that Family Dollar preferred the Dollar Tree offer because it preserved Levine’s job. The rejection of Dollar General’s all-cash offer may bring a sharp reaction from Icahn. Family Dollar has now indicated that no bid that does not include a sinecure for Levine will be acceptable. Icahn should have something to say about that.
Family Dollar’s stock traded down about 0.2% in Thursday’s premarket session, at $79.67 in a 52-week range of $55.64 to $80.10.
Dollar Tree’s shares were down 0.9%, at $54.50 in a 52-week range of $49.59 to $60.19.
Dollar General’s stock traded down about 1.4%, at $62.90 in a 52-week range of $53.00 to $65.99.
READ ALSO: 15 Biggest Employers in the World
Ever wanted an extra set of eyes on an investment you’re considering? Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help guide you through the financial decisions you’re making. And the best part? The first conversation with them is free.Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.