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.
Dollar Tree is buying competitor Family Dollar in a cash-and-stock deal worth about $8.5 billion. The boards of both companies unanimously approved the merger, announced Monday. The transaction is valued at $74.50 a share. Dollar Tree CEO Bob Sasser called the deal a "transformational opportunity." "This acquisition will extend our reach to lower-income customers and strengthen and diversify our store footprint," he said. Family Dollar CEO Howard Levine will report to Sasser. Levine's company will continue to operate under the Family Dollar name. The combined company will have more than 13,000 stores and $18 billion in sales.
Activist investor Carl Icahn said Thursday that he wants to see Family Dollar sold at once, and he told the retailer that he's prepared to seek shareholder support to fire the entire board of directors if he doesn't get his way. Icahn said in a letter to Family Dollar CEO Howard Levine that he wants three seats on the board of directors, which would comprise a new committee tasked with exploring a sale of the company. The letter said Icahn discussed Family Dollar over dinner with Levine on Wednesday night. The two didn't come to any agreement.
Family Dollar said Thursday that it will close hundreds of stores and trim its workforce to cut costs after profits fell sharply in its most recent quarter. The company has struggled to keep up with its rivals in recent quarters. Thursday's poor financial results could revive speculation that Family Dollar might be a takeover target for a larger retailer. "Our second-quarter results didn't meet our expectations," said chief executive Howard Levine. "We're taking a number of important steps through our immediate strategic actions to improve our operational efficiency and deliver better financial returns."
Charlotte Business Journal by , Staff Writer photo JEN WILSON Family Dollar operates more than 7,200 stores 45 states. Staff Writer- Charlotte Business Journal Email | Twitter Family Dollar Stores Inc. posted a 12.1 percent increase in net income to $124.5 million, or $1.06 per diluted share, for its fiscal quarter ended May 26. It is the 17th straight quarter of double-digit gains in earnings for the discount retailer. In the same period last year, the Matthews-based company earned $111.1 million, or 91 cents per diluted share. Revenue grew 9.6 percent to $2.36 billion in the company’s third