Family Dollar’s (FDO) board of directors rejected on Thursday a nearly $10 billion buyout bid from rival discount chain Dollar General (DG). The board cited “antitrust regulatory considerations” as the basis for the rejection, and reaffirmed its preference for a merger with Dollar Tree (DLTR).
Family Dollar CEO Howard Levine said in a statement that the board’s decision was unanimous.
“Our Board of Directors, with the assistance of outside advisors and consultants, has been carefully analyzing the antitrust issues in a potential combination with Dollar General since the beginning of this year, as detailed in the Company`s preliminary proxy statement that was filed by Dollar Tree with the SEC on August,” Levine said, adding that the board reviewed, with its advisors, “all aspects of Dollar General’s proposal and unanimously concluded that it is not reasonably likely to be completed on the terms proposed.”
Dollar General, in a letter to Family Dollar’s board late on Wednesday, questioned if Levine was being driven by self-interest in his support of Dollar Tree’s $8.5 billion cash-and-stock offer.
Levine replied, saying that the letter “contained blatant mischaracterizations and did nothing to address the antitrust issues in Dollar General’s proposal.”
Shares of Family Dollar, Dollar Tree and Dollar General were fractionally down in early market trading hours.