Matthews, North Carolina

Dollar General Corp. raised its bid for smaller Family Dollar Stores to $9.1 billion and is willing to divest twice as many locations to ease antitrust concerns after the retailer's first proposal was rejected for a lower offer. Dollar General bid $80 a share in cash for Matthews, North Carolina-based Family Dollar, compared with an offer of $78.50 made two weeks ago. The company also said today it would sell as many as 1,500 locations, up from 700 in its previous approach, and pay Family Dollar $500 million if the the deal fails on antitrust grounds. 

Family Dollar is rebuffing Dollar General's takeover bid, citing antitrust issues. The discounter's board supports its existing merger with Dollar Tree. Family Dollar Stores Inc. Chairman and CEO Howard Levine said in a statement Thursday that its board and advisers reviewed Dollar General's offer and determined it wasn't reasonably likely to be completed on the terms proposed. Dollar General declined to comment. Family Dollar became a takeover target in part because of its business struggles. The Matthews, N.C.-based company has been shuttering stores and cutting prices in hopes of boosting its financial performance.