Wednesday, September 10, 2014
After warning yesterday that they might do it, Dollar General has gone hostile this morning with a tender offer at $80/share subject to the following conditions:
(i) at least a majority of the outstanding shares tender,
(ii) termination of the Amended Dollar Tree merger agreement and the voting support agreements,
(iii) entry into a merger agreement with Dollar General (in form and substance satisfactory to Dollar General in its reasonable discretion), including a second step 251(h) short form merger,
(iv) entry into definitive tender and support agreements by certain Family Dollar shareholders,
(v) approval of the transaction under Section 203,
(vi) redemption of the Family Dollar Board poison pill, and
(vii) approval by antitrust authorities.
All those reasonable questions that the Faily Dollar board has about the Dollar General bid are still out there. Only now, Dollar General is going straight to the shareholders and asking them to make the decision. Family Dollar does not have a staggered board so, in effect, the scheduled Family Dollar shareholder meeting that will be called this fall to vote yes/no on the Dollar Tree offer should be the referendum on the pair of transactions. Between now and then, expect quite a bit of noise on both sides as they each make their case.